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Monday, September 23, 2013

Governor Signs Legislation Restricting Defense Attorney Fees in Actions for Nonpayment of Wages

Governor Brown has signed SB 462, which restricts attorney fee awards to prevailing defendants in actions for the recovery of wages.

Labor Code section 218.5 allows the prevailing party in an action for nonpayment of wages to recover its reasonable attorney fees and costs. SB 462 amends section 218.5 as follows (amendment in italics): 

(a) In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action. However, if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith....
SB 462 does not address the Supreme Court's holding in Kirby v. Immoos Fire Protection, Inc. (4/30/12) 53 Cal.4th 1244 (discussed here), in which the California Supreme Court considered whether a defendant can recover its attorney fees when it prevails in an action for meal and rest period compensation under California Labor Code section 226.7. The Court concluded that an action under Labor Code 226.7 for meal and rest period violations is not an “action brought for the nonpayment of wages” under section 218.5, so neither employee nor employer can recover its fees in such an action.

More information and the text of SB 462 can be found here.

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