Recovery of Attorneys’ Fees Unavailable for Missed Rest and/or Meal Breaks

Although California Labor Code section 218.5 mandates an award of reasonable attorney fees to the prevailing party in any action for the nonpayment of wages, the recent decision in Betancourt v. OS Restaurant Services, LLC, et al. (Cal. Ct. App., Apr. 30, 2020, No. B293625) 2020 WL 2122642 (“Betancourt”) has confirmed that an action brought for failure to provide rest or meal breaks is not considered an action for nonpayment of wages within the meaning of section 218.5. Therefore, missed rest or meal breaks alone cannot form the basis for the recovery of attorneys’ fees.

In the Betancourt case the plaintiff, Raquel Betancourt (“Betancourt”), filed a lawsuit against her former employer that primarily involved claims of whistleblower retaliation and wrongful termination related to her alleged reports of rest break and food safety violations. She further alleged she was entitled to recover unpaid premium wages for the rest break violations, penalties, costs, and attorneys’ fees, as well as waiting time penalties.

About a year into litigation, the parties agreed to settle the action. Betancourt agreed to accept $15,375.00 in settlement of her claims for failure to provide meal and rest periods, failure to provide accurate itemized wage statements, failure to pay all wages upon termination in exchange for plaintiff dismissing her claims for retaliation and wrongful termination claims, with prejudice. The parties agreed to delay addressing the issue of whether Betancourt was entitled to recover reasonable attorneys’ fees incurred for litigating her claims.

Betancourt subsequently filed a motion to recover attorneys’ fees, which she claimed amounted to approximately $580,794.00. No time records were provided to substantiate the claim, but Betancourt’s counsel insisted he had incurred approximately 869.6 hours working on the case. The defendants opposed the motion, and, in addition to disputing the reasonableness of the fees, argued that Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244 dictates that a party cannot recover attorneys’ fees when prevailing only on a claim for meal or rest break premium pay.

After multiple briefings and several hearings, the court, without calling the matter for a final hearing, granted the motion for attorneys’ fees in the amount of $280,794.00 (and costs of $8,671.95) without addressing the applicability of section 218.5. The trial court ruled simply that “although ‘some aspects’ of plaintiff’s wage statement and waiting penalty claims ‘are seemingly derivative of the section 226.7 claim, Plaintiff has proffered evidence that establishes that [those claims] were also premised on timekeeping and payroll schemes… and Plaintiff is thusly entitled to attorneys’ fees pursuant to Labor Code section 218.5.”

The Court of Appeal, however, reversed this decision. The court relied heavily on Kirby and its progeny, reasoning that an action for nonprovision of meal or rest breaks is not turned into an action brought for nonpayment of wages even though the remedy is an additional hour of pay. (See also Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1256-1257.) The court further noted that a claim for waiting time penalties is a purely derivative claim based on unpaid wages from which the penalties arise, and that, because a claim for nonprovision of rest and meal breaks is not an action for unpaid wages, it cannot therefore be the basis for waiting time penalties. (See also Ling v. P.F. Chang’s China Bistro, Inc. (2016) 245 Cal.App.4th 1242, 1261.)

Accordingly, Betancout further clarifies and confirms the rule set forth in Kirby and its progeny that a plaintiff cannot recover penalties for waiting time and wage statement violations solely based on the nonprovision of rest or meal periods, and cannot use these claims as the basis for the recovery of attorneys’ fees pursuant to section 218.5.

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May 26, 2020