California Further Restricts Employer Recovery of Prevailing Party Attorney’s Fees

California has amended Labor Code § 218.5 to limit the circumstances under which an employer may recover its attorney’s fees and costs as the prevailing party in a lawsuit in which an employee has sued for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions (SB 462). Prior to enactment of Senate Bill 462, the prevailing party (either the employer or the employee) could seek recovery of his, her or its attorney’s fees and costs. As amended, the statute provides that “if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith.” (Even before it was amended, Section 218.5, by its terms, did not apply to claims for which attorney’s fees are recoverable under Labor Code § 1194 (e.g., claims to recover minimum wage or overtime compensation), and the California Supreme Court determined last year that Section 218.5 does not apply to claims brought for unpaid meal and rest breaks. See Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244 (2012).)

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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