Employers scored a significant victory with the Supreme Court's decision in Kirby v. Immoos Fire Protection (2012) 53 Cal.4th 1244. The court determined that a prevailing party in a claim of missed meal or rest periods under Labor Code section 226.7 is not entitled to attorneys' fees. In this particular case, the employer was the prevailing party and it did not obtain attorneys' fees. However, in most cases, the employee's lawyers use the prospect of obtaining attorneys' fees in order to increase the settlement value of their clients' cases. What this should mean is that fewer cases will be filed alleging meal and rest period violations.
Kirby filed multiple claims asserting various violations of wage and hour laws. He eventually settled his claims with some defendants and then dismissed his claims against the employer. The employer then sought attorneys' fees under Labor Code section 218.5.
Section 218.5 provides for attorneys' fees to the prevailing party in an "action for the non-payment of wages" and other benefits.
In 2007, the Supreme Court held that the one-hour premium imposed upon the violation of a meal or rest period constituted a wage rather than a premium. Murphy v. Kenneth Cole Productions (2007) 40 Cal.4th 1094. This decision was substantial since for two reasons: (1) The statute of limitations for non-payment of wages is three years and that for a penalty is one year; and (2) attorneys' fees became available for miss meal and rest period cases.
Apparently, we all had that wrong when it came to attorneys' fees. According to the Supreme Court, the non-payment of wages is not the "gravamen" of a section 226.7 claim. The one-hour premium is the remedy and whether or not it is paid, does not have a bearing on whether a violation of section 226.7 occurred. And attorneys' fees under section 218.5 are in actions for the non-payment of wages, not the violation of the meal and rest period law.
I am surprised, but pleased, with the Supreme Court's ruling. I hope that it goes a long way in reducing the number of civil cases filed with allege meal and rest period claims. Without the potential of obtaining their fees, attorneys will be less interested in asserting those claims. Yet, the employee still has a fair avenue for redress by going to the Labor Commissioner and seeking the payment of the one-hour premium.
Smile, you won one! With Brinker that gives employers two substantial victories in 2012.