Cal-Peculiarities: How California Employment Law is Different 2022 Edition

112 | 2022 Cal-Peculiarities ©2022 Seyfarth Shaw LLP  www.seyfarth.com operators paid Shell a monthly rent while employing their own employees. When an operator’s employee sued Shell on wage and hour claims, the Court of Appeal ultimately held that Shell was a joint employer because Shell maintained control over the operator’s “finances, day-to-day operations, facilities, and practices” such that it could have stopped employees from “working in their stations through a variety of means.” The Court of Appeal specifically noted that Shell employees told the plaintiff they had the power to have him fired, that Shell had contractually mandated control over the operator’s bank accounts, and that Shell could remove individual stations from the operator at any time . 269 5.12 Anti-Employer Rules Regarding Attorney Fees and Costs 5.12.1 Wage claims For claims seeking to recover unpaid minimum wages or overtime premium pay, California favors plaintiffs with a one-way fee-shifting provision that entitles only the prevailing employee to recover attorney fees . 270 For claims seeking other forms of unpaid wages, a prevailing employee remains entitled to attorney fees, while the prevailing employer is so entitled only upon a finding that the employee sued in bad faith . 271 Section 218.5 of the Labor Code originally provided, in an even-handed way, for prevailing-party attorney fees as to wage claims that did not involve minimum wages or overtime premium wages. Employers invoked this statute when they defeated claims seeking pay for denied meal periods or rest breaks. Employers could say that those claims were claims for “wages” because a 2007 California Supreme Court decision had held that meal and rest pay was a “wage,” not a “penalty. ” 272 In 2012, however, in Kirby v. Immoos Fire Protection , the California Supreme Court deprived employers of this leverage. Kirby determined that claims for meal and rest pay are not claims for “wages” after all, but rather are claims for violation of the employer’s obligation to provide meal and rest breaks . 273 Kirby implied that if the claims had involved wages instead of penalties, then an award of attorney fees to the prevailing employer would have been appropriate. The attention thus focused on Section 218.5 prompted the Legislature in 2013 to amend the statute to tilt the playing field still further in favor of plaintiffs . 274 Now, while Section 218.5 continues to entitle employees to attorney fees when they win claims for unpaid wages, the statute entitles prevailing employers to attorney fees only if the court finds that the employee brought the lawsuit in bad faith . 275 M eanwhile, as to actions for unpaid minimum or overtime premium wages, it remains the case that only the successful employee—and never the successful employer—is eligible to recover attorney fees . 276 The Court of Appeal has denied an employer prevailing-party attorney fees where the claim was for split-shift premium pay (considered to be a claim for minimum wages), but has allowed fee applications where the claim was for reporting-time pay (considered to be a claim for unpaid wages at the employee’s regular rate ). 277 5.12.2 Court-enhanced attorney fees by use of multipliers Under federal statutes authorizing an award of attorney fees to the prevailing party, the award is simply the product of (a) the hours reasonably expended on the winning effort and (b) the reasonable rate for those hours. There is usually no after-the-fact multiplier or enhancement to augment the plaintiff attorney’s reward for pursuing a risky case , 278 a lthough there are rare circumstances where an enhancement may be appropriat e. 279 The Court of Appeal once agreed, opining that an attorney-fee enhancement would “at best serve no purpose and at worst encourage pursuit of unmeritorious claims. ” 280 But the California Supreme Court disagreed, holding that trial courts can grant an enhanced attorney-fee award to compensate plaintiff’s attorneys for the risk that they assume in taking a case on a contingent fee basis . 281