Attorneys Fees in Missed Meal and Rest Break Cases?

Second Quarter 2012Articles California Update

In a unanimous and surprising decision,the California Supreme Court recently held that neither a plaintiff who prevails on a claim for missed meal or rest periods, nor an employer who successful defends against such a claim, can recover attorney’s fees under Labor Code sections 218.5 and 1194. While this is mostly good news for employers, it is doubtful that the decision in Kirby v. Immoos Fire Protection, Inc., Case No. S185827 (Cal. Apr. 30, 2012), will help stem the tide of meal and rest period lawsuits in California.

The plaintiffs in Kirby sued their former employer for failing to provide rest breaks in violation of Labor Code section 226.7, among other claims. After the plaintiffs dismissed this claim with prejudice, the employer moved for attorney’s fees as the prevailing party under Labor Code section 218.5, which authorizes the award of attorney’s fees to a prevailing party “[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions . . . ." A claim for missed rest breaks, the employer argued, is an “action brought for nonpayment of wages,” since section 226.7 requires employers to pay the employee “an additional hour of pay at the employees’ regular rate of compensation for each work day that the meal or rest period is not provided,” and because that hour of compensation has previously been deemed “wages” instead of “penalties” by the California Supreme Court in Murphy v. Kenneth Cole, 40 Cal.4th 1094 (2007).

The plaintiffs argued that a claim for missed rest breaks is actually an action for unpaid minimum wage, and that the employer’s motion for attorney's fees was therefore barred by Labor Code section 1194, which provides that only prevailing employees can recover attorney’s fees in an action for unpaid “legal minimum wage or . . . legal overtime compensation.”

According to the Supreme Court, both sides had it wrong. While the remedy for missed breaks is an “additional hour of pay,” the “legal violation triggering the remedy” is the failure to provide meal or rest breaks, not the failure to pay wages. Therefore, neither Labor Code section 1194 nor section 218.5 authorizes an award of attorney’s fees to a party who prevails on a section 226.7 claim for missed rest or meal periods.

This does not necessarily mean that prevailing plaintiffs can never recover attorney’s fees on a missed meal or rest period claim. The court declined to address whether attorney’s fees are recoverable in cases where a meal or rest period claim is asserted along with a claim for unpaid wages or overtime. Plaintiffs’ attorneys also will continue trying to recover fees under California Code of Civil Procedure section 1021.5, California’s private attorney general statute.

A few more interesting points about this case:

  • The Kirby court insists this decision is not at odds with Murphy v. Kenneth Cole, 40 Cal.4th 1094 (2007), where the court held that the remedy for missed breaks is a “wage” for purposes of determining which statute of limitation applies to section 226.7 claims.
  • It will be interesting to see if and how plaintiff’s attorneys make use of this bit of dicta: “[S]ection 226.7 does not give employers a lawful choice between providing either meal and rest breaks or an additional hour of pay. . . [A]n employer’s provision of an additional hour of pay does not excuse a section 226.7 violation.” You would think no one would bother to sue for missed breaks if the additional hour of pay has already been paid, but crazier things have happened.
  • The Kirby court also noted that “it is up to the legislature to decide whether section 1194’s one-way fee shifting provision should be broadened to include section 226.7 [missed meal and rest period] actions.” Will the California Legislature accept this invitation?