Prevailing Employer Is Entitled To Fee Award

by Hinshaw & Culbertson LLP

In Aleman v. AirTouch Cellular, 2012 DJDAR 13269 (2012), the California Court of Appeal for the Second Appellate District reexamined the denial of an attorney fee award based on the recently decided California Supreme Court decision in Kirby v. Immoos Fire Protection Inc., 53 Cal. 4th 1244 (2012) (discussed here).

Former employees of AirTouch Cellular sued the company, alleging that it failed to pay them compensation for attending mandatory meetings. The thrust of the plaintiffs’ claim was that AirTouch violated two separate provisions of the Industrial Welfare Commission’s Wage Orders. The trial court granted the defendant’s motion for summary judgment, finding that the plaintiffs were not entitled to additional compensation as they were paid significantly more than the minimum wage, which would trigger the requirement to pay more money.

After AirTouch sued for summary judgment but prior to its ruling, the plaintiffs moved for class certification. The court denied the plaintiffs’ class certification motion and the plaintiffs appealed. The second district rendered a decision in December of 2011, but in June 2012, the California Supreme Court directed reconsideration of the ruling in light of the Kirby decision.

After winning summary judgment, the defendant sought attorney fees under California Labor Code Section 218.5. Labor Code Section 218.5 allows a prevailing defendant to recover reasonable fees specified in wage litigation. The plaintiffs contended their causes of action were governed by Labor Code Section 1194. That Code section states that only plaintiffs in litigation involving unpaid wage allegations have standing to recover fees. Over the plaintiffs’ objection, the trial court awarded AirTouch $146,000 in fees against one plaintiff and $140,000 for the second.

The court of appeal reversed the award of fees in part. The court noted that in Kirby, the California Supreme Court noted that Section 1194 applies to claims for unpaid minimum wages or overtime compensation. Thus, to fall under Labor Code Section 1194, a claim must seek unpaid minimum wages or overtime compensation, as those terms are generally understood.

The second district held that only one of the claims was subject to Labor Code Section 1194. In doing so, it explained that the “split shift claim” is subject to Section 1194, given that the claim seeks to recover unpaid minimum wage compensation. However, a “reporting time claim” is not subject to Labor Code Section 1194. That claim seeks to recover unpaid wages. For these reasons, the court remanded the case, directing the trial court to allocate the fees incurred by AirTouch in defending the reporting time claim.


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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