California’s Supreme Court has again spoken on meal and rest period litigation, this time holding neither employers nor employees may recover their attorney’s fees in cases requiring employers to provide meal breaks and rest breaks. In the wake of its highly publicized Brinker Restaurant Corporation decision, where the Supreme Court ruled California law requires employers to provide but not to ensure non-exempt employees take meal breaks, the Court’s April 30 unanimous decision in Kirby v. Immoos Fire Protection, Inc. holds neither employers nor employees may recover attorneys fees in claims brought under the meal and rest statute. 

Labor Code section 226.7 requires employers to provide non-exempt employees with meal and rest breaks according to the terms of regulations issued by the California Industrial Welfare Commission. Labor Code section 218.5 calls for a trial court to award attorneys’ fees to the prevailing party “in any action brought for the non-payment of wages or fringe benefits, or health and welfare or pension fund contributions.” While typically California Labor Code provisions call for attorney fee awards to prevailing employees but not to prevailing employers, under section 218.5 the court may award fees to either employees or employer. Another statute, Labor Code section 1194, calls for attorney fee awards to prevailing employees only – not to employers – in claims for unpaid minimum wages. 

The Supreme Court in Kirby ruled that neither section 218.5 nor section 1194 apply to claims to recover meal and rest period premiums under section 226.7. Although the Supreme Court held five years ago in Murphy v. Kenneth Cole Productions, Inc. that the extra-hour-of-pay premiums for unpaid meal and rest periods were wages for statute of limitation purposes, in Kirby the Court held section 226.7 “is primarily concerned with ensuring the health and welfare of employees by requiring that employers provide meal and rest-break periods as mandated” and is not a wage payment statute. Consequently, the Court said, the attorney fee provisions of sections 218.5 and 1194 do not apply to claims brought under section 226.7. 

In Kirby, two plaintiffs sued corporate Defendant Immoos and a number of “John Doe” Defendants for various violations of the California Labor Code and related California law provisions, including the familiar claims under the Unfair Competition Law, Bus. & Prof. Code § 17200 et seq. Included among the seven causes of action was a meal and rest break violation claim under section 226.7. The two plaintiffs settled their claims with the individual defendants, and dismissed their claims against the corporate defendant Immoos. Immoos moved for attorneys’ fees as a prevailing party under section 218.5, asserting that because the meal and rest claims against it had been dismissed with prejudice, without any finding of liability, they were a prevailing party and section 218.5 should apply. The trial court granted attorneys’ fees to Immoos, and both parties appealed, with the Plaintiffs alleging they should receive attorneys fees on the meal and rest claim under section 1194. 

The California Supreme Court reversed, finding “in light of the relevant statutory language and legislative history…neither section 1194 nor section 218.5 authorizes an order of attorneys’ fees to a party that prevails on a section 226.7 claim.” Because section 1194 referred explicitly to minimum wage and overtime claims, the court saw no reason to expand its language to include a meal and rest break violation. Because “non-payment of wages” did not in the court’s view constitute “the gravamen of a §226.7 violation,” the language of §218.5 also did not apply.

While Kirby prevents an employer from shifting fees to unsuccessful meal and rest plaintiffs, it “nevertheless constitutes a victory for employers,” observes Jackson Lewis partner Rob Pattison. “Plaintiffs’ counsel in meal and rest actions may be forced to rely on a contingency arrangement with their clients to recover fees as a portion of a judgment or settlement, or in the alternative charge their clients an hourly or flat fee rate for their services. The unavailability of fee-shifting can serve as motivation to resolve the claims.” However, “meal and rest actions almost always include claims under provisions of the Labor Code which do provide for fee-shifting under section 1194 as well as under PAGA, in addition to the fee-shifting available under the FLSA and other employment statutes.” PAGA, the California Labor Code Private Attorneys General Act, permits “aggrieved employees” to recover a portion of civil penalties in court that could have been awarded in administrative claims before the State Labor Commissioner. PAGA also provides for attorneys’ fee awards. 

This space and Jackson Lewis’ California Workplace Law Blog will continue to provide analysis as California’s trial courts interpret and apply Brinker and Kirby.