Labor Code section 226.7 prohibits employers from requiring employees to work during a rest or meal period mandated by an applicable order of the Industrial Welfare Commission (IWC). Employers who violate this labor provision are subject to a penalty in the form of “one additional hour at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.” (Cal. Lab. Code § 226.7)

Certain Labor Code statutes permit the prevailing party to recover attorney’s fees for successfully defending a claim. For instance, section 1194(a) provides an award of attorney’s fees to prevailing employees “in an action for any unpaid legal minimum wage or legal overtime compensation.” This is a one-way fee shifting statute. Similarly, section 218.5 provides an award of attorney’s fees to a prevailing party “in any action brought for the non payment of wages, fringe benefits, or health and welfare or pension fund contributions.” This is a two-way fee shifting statute.

The California Supreme Court was asked to decide whether attorney’s fees can be awarded under either section 1194 or section 218.5 to a party that prevails in a section 226.7 action. In Kirby v. Immoos Fire Prot., Inc., 53 Cal. 4th 1244 (2012), the California Supreme Court held that neither section 1194 nor section 218.5 authorizes an award of attorney’s fees to a party that prevails on a section 226.7 claim.

Plaintiff Kirby sued defendant Immoos Fire Protection, Inc. (IFP) for failure to provide rest breaks as mandated by section 226.7, but Kirby later dismissed this claim. IFP subsequently sought $50,000 of attorney’s fees for successfully defending the claim. The trial court awarded fees, and the Court of Appeal affirmed.

In reversing the award, the California Supreme Court rejected both Kirby’s and IFP’s arguments. First, Kirby argued that the required payment for missed meal and rest breaks; the one hour of additional pay, is equivalent to payment of “minimum wage” and, thus, section 1194 applied. The Court did not agree with Kirby’s broad interpretation, that the penalty associated with section 226.7 constitutes a “minimum wage.” Thus, it held that attorney’s fees were not recoverable under section 1194.

Second, IFP argued that the one hour of additional penalty constituted a “wage,” and therefore section 218.5 applied. The Court disagreed and found that the required penalty does not constitute wages of any kind. The Court further noted that it was up to the Legislature to bring section 226.7 claims within the coverage of these fee shifting statutes.

For further information, please contact:  Nicholas P. Connon, Managing Partner; Tel:  +1.626.638.1757; e-mail: nconnon@connonwood.com