Section 1194 Harmonized With Labor Code Section 218.5; But Routine Costs Are Available For Winning Employer.
Here is an interesting case involving statutory interpretation of interest to employment practitioners who follow us.
In United Parcel Service Wage and Hour Cases, Case No. B221709 (2d Dist., Div. 8 Feb. 24, 2011) (certified for publication), employer UPS prevailed against plaintiff in an action that contained multiple wage hour claims, including ones for failure to pay overtime compensation, failure to provide meal/rest periods, failure to maintain/provide itemized wage statements; conversion, injunctive/equitable relief, and a UCL claim under B & P § 17200 et seq. All but the overtime compensation claim were disposed of through pretrial motions, and employee lost the first claim in front of a jury. UPS moved to recover attorney’s fees under Labor Code section 218.5, conceding it was not entitled to fees on the overtime compensation claim but requesting $106,799 in fees on the other claims and $20,703.70 in statutory costs for all claims. The trial court determined that fees and statutory costs were appropriate, awarding UPS $100,000 in statutory fees under section 218.5 and $16,693.70 in costs under CCP § 1032(b) (after UPS withdrew some costs from the request before the trial court).
Employee appealed and was partially successful.
Skilled workers “freshen up” on overtime job with hot soup and coffee. 1942. Library of Congress.
The fee award was reversed, but the costs award was affirmed.
The basis for the fee order reversal was that section 218.5 allows for fee recovery to any prevailing party (plaintiff or defendant) in “any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions,” but expressly carves out “any action for which attorney’s fees are recoverable under [Labor Code] section 1194.” In turn, section 1194 only has a plaintiff fee-shifting provision with respect to overtime compensation claims. So, the statutory interpretation issue was what did “any action” mean in the section 218.5 carve-out: does it mean the employer-defendant cannot recover fees in any civil action where overtime compensation claims are joined with other claims or does it mean the defendant cannot recover just as to the overtime compensation claim but that the remaining other claims can give rise to fee exposure if there is a basis for such fee entitlement?
The former approach was adopted by the appellate court, finding “any action” should be interpreted to mean “any cause of action.” Otherwise, an absurd consequence could result, with plaintiffs defeating fee recovery by defendants simply through permisssive joinder of overtime compensation claims with other claims so as to defeat defendants’ entitlement to fees on the other claims.
The Court of Appeal then did a claim-by-claim analysis and concluded things this way: (1) no fees for the overtime compensation claims based on section 1194 precluding an employer’s fee recovery; (2) no fees for the wage statement itemization claim based on the unilateral fee shifting in Labor Code section 226(e) that only favor plaintiffs; (3) no fees for common law conversion; (4) no fees on the UCL claim; and (5) no fees on the meal/rest break claims based on the overall statutory Labor Code scheme, rejecting the view that these claims are encompassed within the “wages” terminology of section 218.5.
Different matter as to costs. Based on Murillo v. Fleetwood Enterprises, Inc., 17 Cal.4th 985, 988-990 (1998), nothing in the special fee-shifting provisions preempted the availability of statutory costs recovery under CCP § 1032(b). There is no express statutory provision in section 1194 that expressly prohibits recovery of statutory costs.
This was a 3-0 opinion, carefully authored by Justice Grimes.