Employers Catch a Break: No Attorneys’ Fees for Missed Meal and Rest Period Claims

Navigating the California Labor Code can leave California businesses feeling like they are walking through a field full of landmines, with stiff penalties and mandatory attorneys’ fees for violations often leading to devastating results.

Recently, however, California employers caught a break.  In Betancourt v. OS Restaurant Services, LLC, the Second District Court of Appeals ruled that attorneys’ fees are not recoverable in an action for failure to provide meal periods or rest breaks under Labor Code §226.7.

Attorneys’ Fees Normally Recoverable

Where a party has requested an award of attorneys’ fees at the initiation of an action, the Labor Code mandates an award of reasonable attorneys’ fees under Labor Code §218.5(a) to the prevailing party in any action brought for nonpayment of wages.

Claim for Missed Breaks Is Not a Claim for “Nonpayment of Wages”

California law is clear, though, that an action for non-provision of meal periods or rest breaks is not an action for “nonpayment of wages.”  The remedy for failure to receive rest breaks or meal periods is an additional hour of pay (often described as “premium pay” in the case law) – but this does not convert the lawsuit into one for “nonpayment of wages.”  And because a lawsuit for non-provision of breaks is not one for unpaid wages, a plaintiff in such an action cannot recover derivative waiting time and wage statement damages under Labor Code §§203 and 226.  As a result, the Betancourt Court of Appeal found that the plaintiff could not recover attorneys’ fees under Labor Code §226(e), either.  The Court cited favorably to recent and well-established California law, including Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4^th 1244 (2012), Ling v. P.F. Chang’s China Bistro, Inc., 245 Cal. App. 4^th 1242 (2016), and Naranjo v. Spectrum Security Services, Inc., 40 Cal. App. 5^th 444 (2019), as support for its decision.

One Less Hammer

The Betancourt decision takes away one of the biggest “hammers” in wage and hour litigation – the threat of mandatory attorneys’ fees awards – but only eliminates that hammer in cases involving claims for denial of meal or rest breaks.  Businesses should remain vigilant to follow the Labor Code and Wage Orders meticulously, and to consult counsel if they are uncertain of whether they are doing so.

Read the full Betancourt decision here.