Kirby v. Immoos: Cal. Supreme Court Rules No Fee-Shifting for Rest Break Claims

In a ruling that reversed a Court of Appeal decision granting attorney’s fees to a defendant employer, the California Supreme Court has held that prevailing parties in rest break actions may not recover attorney’s fees. See Kirby v. Immoos Fire Protect., Inc., No. S185827 (Cal. Apr. 30, 2012) (available here).

The decision concerned the interplay between California Labor Code section 226.7, which provides for the payment of an additional hour of pay as compensation for meal and rest break violations, and section 218.5, which provides that “[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action. . . . [¶] This section does not apply to any action for which attorney’s fees are recoverable under Section 1194.”

The Supreme Court unanimously held that neither Section 218.5 nor Section 1194 provide for a prevailing party’s recovery of attorney’s fees in connection with a rest break claim under Section 226.7. See Slip op. at 2. In reaching their holding, the justices reasoned that a 226.7 claim is not an action “brought for the nonpayment of wages” within the meaning of Section 218.5, but is instead “brought for the nonprovision of meal and rest periods”; the payment of “wages” as a penalty for missed breaks is merely incidental, not the impetus for the claim itself. See id. at 11-13. As such, the court found that the defendant could not recover attorney’s fees.

Kirby rejected the defendant’s argument that, under Murphy v. Kenneth Cole, because a violation of Section 226.7 allows a remedy of a “wage,” an action under Section 226.7 is an action for “wages” under Section 218.5. See id.; see also Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094, 1102 (2007) (holding that Section 226.7 payment is “wage”). The decision took a complex path to distinguishing Murphy and reaching its ultimate conclusion:

As a textual matter, we note that section 218.5 uses the phrase “action brought for” to mean something different from what the phrase means when it is coupled with a particular remedy (e.g., “action brought for damages” or “action brought for injunctive relief”). An “action brought for damages” is an action brought to obtain damages. But an “action brought for nonpayment of wages” is not (absurdly) an action to obtain nonpayment of wages. Instead, it is an action brought on account of nonpayment of wages. The words “nonpayment of wages” in section 218.5 refer to an alleged legal violation, not a desired remedy.

Slip op. at 13.

In rejecting the defendant’s attempt to recover its attorney fees incurred in the course of defeating the plaintiff’s rest break claim, the Kirby decision concluded that “the most plausible inference to be drawn from this history is that the Legislature intended section 226.7 claims to be governed by the default American rule that each side must cover its own attorney’s fees.” Id. at 17. The Kirby opinion was authored by the California Supreme Court’s newest member, Justice Goodwin Liu.