Court of Appeal Holds Employers Prevailing On Claims For Allegedly Unpaid Minimum Wages Or Overtime Are Entitled To Recover Their Costs

Over ten years ago, in Earley v. Superior Court (2000) 79 Cal.App.4th 1420, the California Court of Appeal held that employers who defeat claims for allegedly unpaid overtime wages or minimum wages are not entitled to recover their attorneys fees. The court reasoned that Labor Code section 1194 is a one-way attorney's fees statute that permits prevailing employees but not prevailing employers to recover their attorney's fees. In that case, the court further held that permitting prevailing employers to recover their attorney's fees would be contrary to public policy in that it would have a chilling effect on the right of employees to sue for allegedly unpaid overtime wages or minimum wages. 

On August 11, 2011, in Plancich v. United Parcel Service, Inc., the Court of Appeal held that Labor Code section 1194 does not bar an employer prevailing on a claim for allegedly unpaid overtime wages or minimum wages from recovering its costs (i.e., certain litigation expenses) pursuant to Code of Civil Procedure section 1032(b), which states: "Except as expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." The court explained that "the plain language of the statutes is unambiguous—Code of Civil Procedure section 1032, subdivision (b) requires express statutory language exempting a prevailing party from recovering his costs, and section 1194 does not contain language barring a prevailing employer from collecting his costs."

Although the deck remains stacked against California employers in many ways, this new decision provides employers with at least some welcome recourse when an employer is able to defeat a meritless claim for allegedly unpaid overtime wages or minimum wages, and it might discourage some employee litigants from needlessly running up an employer defendant's litigation costs in the pursuit of doubtful claims for allegedly unpaid overtime wages or minimum wages. Every little bit helps.

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