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Attorney Fees Award Upheld to California Server Not Provided Rest Breaks

In California, plaintiffs are allowed to file claims for attorney's fees and legal costs when they file lawsuits against their employers for wage and hour claims. In the past, attorney's fees were not available in cases only involving claims for meal and rest break violations because the premiums for missed breaks were not considered to be wages. However, in Betancourt v. OS Restaurant Services, LLC, Cal. Ct. App. Case No. B293625, the Court of Appeal upheld an award of attorney's fees for missed breaks following a decision by the California Supreme Court that premiums for meal and rest breaks do constitute wages.[1]

Factual and Procedural Background

Raquel Betancourt was employed as a server at Fleming's Steakhouse & Wine Bar in Los Angeles from 2008 to 2015, which was owned and operated by OS Restaurant Services, LLC and Bloomin' Brands, LLC. During her time working for the company, she was routinely denied meal and rest breaks. After leaving her employment, she filed a lawsuit against the defendants for their failure to provide meal breaks, wage and hour violations, and wrongful termination by the defendants in retaliation for complaining about their labor code violations and food safety regulations internally.[2]

After she saw a chef cutting raw chicken on a vegetable cutting board, Betancourt complained to her manager. However, nothing was done. Three months later, Betancourt told the senior human resources partner, Tiffany Yeargin, that the chefs routinely used vegetable cutting boards to cut raw chicken and that she was routinely denied her mandatory 10-minute rest breaks. After she complained to Yeargin, the managers at the restaurant began scrutinizing her performance and disciplining her for unwarranted reasons. She was still denied her 10-minute rest breaks.

In Dec. 2015, she was given a written reprimand and suspended for insubordination. After she complained about the reprimand and suspension to Yeargin, she was terminated from her job. Betancourt's lawsuit against the defendants alleged several causes of action, including wrongful termination in retaliation for her complaints about the safety violations and lack of rest breaks and claims for premium wages for the rest breaks she wasn't given under Cal. Lab. Code § 226.7.[3] She also requested attorney's fees under Cal. Lab. Code § 218.5 and other provisions.[4]

The defendants filed an answer to Betancourt's complaint in Oct. 2016. In Oct. 2017, the trial court issued an order to compel Betancourt to comply with discovery and issued sanctions against her. After she provided 1,000 pages of discovery to the defendants, the parties settled the lawsuit the following day. The terms of the settlement were placed on the record in court on Oct. 17, 2017. The defendants agreed to pay Betancourt $15,375 to fully settle her meal and rest break claims and wage and hour claims. They also agreed to waive her payment of sanctions. In exchange, Betancourt agreed to drop the wrongful termination and retaliation claims.

Betancourt then filed a motion for attorney's fees in the amount of $580,794 under Cal. Lab. Code §§ 218.5 and 226 for 869.5 hours of work performed by her attorney's law firm. She argued that because her meal and rest break claims were closely aligned with her wrongful termination and retaliation claims, she was entitled to recover attorney's fees and costs. The defendants opposed her motion, arguing that premiums for missed meal and rest breaks were not considered wages under the case law, so she was not entitled to recover attorney's fees under the California Labor Code. They also argued that the bulk of her claim was focused on wrongful termination and retaliation with only a small portion focused on missed meal and rest breaks.[5]

After re-examining the time spent on the case, Betancourt's attorney reduced the amount he was seeking for attorney's fees to $348,476. He later sought an additional $48,914 for the work he performed after filing the motion for a total of $397,390 but did not submit any time records to the court.

The court entered an order awarding $280,794 in attorney's fees and $8,671.95 in costs on July 13, 2018. The court also issued a show cause order for dismissal on Aug. 31, 2018. The court found that some of the attorney's fees were premised on section 218.5 and were thus available. However, the court found that the amount Betancourt's attorney originally sought was unreasonable and thus reduced the total award amount. Betancourt's attorney filed a proposed judgment with the court, and the defendants objected because they were not granted a hearing, and Betancourt didn't request attorney's fees for an eligible claim in her complaint. The court overruled the objections and entered judgment on Aug. 31, 2018.

The defendants filed an appeal. The Court of Appeal initially found that premiums for missed meal and rest breaks were not wages under § 218.5, so Betancourt wasn't entitled to them. The California Supreme Court granted certiorari to Betancourt, and it remanded the case back to the Court of Appeal to determine whether its reasoning was accurate in light of the Supreme Court's decision in Naranjo v. Spectrum Security Services, Inc., 13 Cal.5th 93 (2022).[6]

Issue: Do premiums for missed meal and rest breaks qualify as nonpayment of wages under Cal. Lab. Code § 218.5?

On remand from the California Supreme Court, the California Court of Appeal reconsidered Betancourt's case in light of the California Supreme Court's decision in Naranjo. In that case, the California Supreme Court held that premiums paid for missed meal and rest breaks constituted wages under Cal. Lab. Code § 218.5 and must be reported on wage statements.

Rule: Premiums for missed meal and rest breaks are wages under the California Labor Code.

Under Naranjo, premiums for missed meal and rest breaks are considered to be wages under the state's laws. Failing to timely pay them can result in waiting penalties. Betancourt argued that the attorney's fees were thus appropriate since her lawsuit sought the recovery of wages she wasn't paid by the defendants. The defendants argued that she was still not entitled to an award of attorney's fees because no admissible evidence was presented about wage statement violations and that the settlement agreement could not be used to prove their liability.

Analysis

The Court of Appeal re-examined Betancourt's request for attorney's fees in light of the California Supreme Court's decision in Naranjo and the statutory language included in Cal. Lab. Code § 218.5. Section 218.5 allows plaintiffs to recover attorney's fees for nonpayment of wages.[7] Before the Naranjo was decided, the case law indicated that premiums for meal and rest breaks were not wages under the statute and thus could not form the basis for an award of attorney's fees. However, the California Supreme Court's decision found that premiums for meal and rest breaks did constitute wages.

The Court of Appeal considered the arguments the defendants made about why the trial court's order awarding attorney's fees should still be reversed. The defendants argued that their settlement agreement was inadmissible as evidence and could not be used to show they were liable for Betancourt's claims and that no other admissible evidence existed. The Court of Appeal noted that the defendants entered into a stipulated settlement agreement to pay Betancourt $15,375 in wage and hour claims for the missed meal and rest breaks, so Betancourt was the prevailing party. The court stated that the defendants could not come back later and demand that Betancourt prove her claims after they had agreed to settle them in her favor.

The defendants also argued that most of the attorney's time was spent litigating the wrongful termination and retaliation claims that the parties agreed to dismiss. They argued that because of this, Betancourt's claim for attorney's fees was waived. However, the court found that the claims were intertwined with the retaliation and wrongful termination claims, and the trial court accepted Betancourt's attorney's assessment that he had only spent about 10% of his time solely devoted to the wrongful termination and retaliation claims without considering the underlying claims for wage and hour violations. The Court of Appeal noted that the trial court judge had handled the case from the beginning, and the Court of Appeal could not override the trial court's judgment about the amount of time Betancourt's lawyer had spent on the wage and hour claims.

Conclusion

The Court of Appeal affirmed the trial court's award of attorney's fees and costs. It also awarded Betancourt her costs on appeal.

Talk to a Los Angeles Employment Lawyer

If your employer has failed to pay you for all of the hours you have worked, including for missed meal breaks or rest breaks, you might be entitled to pursue compensation through a wage and hour claim. An experienced employment lawyer at the law firm of Steven M. Sweat, APC can evaluate your claim and the evidence and help you understand whether your claim has legal merits. Call us today for a free consultation at 866-966-5240.

Sources

[1] https://law.justia.com/cases/california/court-of-appeal/2022/b293625a.html?utm_source=summary-newsletters&utm_medium=email&utm_campaign=2022-09-16-labor-employment-law-92093eb220&utm_content=text-case-title-5

[2] https://www.elaborlaw.com/wage-and-hour-claims.html

[3] https://casetext.com/statute/california-codes/california-labor-code/division-2-employment-regulation-and-supervision/part-1-compensation/chapter-1-payment-of-wages/article-1-general-occupations/section-2267-work-during-meal-rest-or-recovery-period/1

[4] https://casetext.com/statute/california-codes/california-labor-code/division-2-employment-regulation-and-supervision/part-1-compensation/chapter-1-payment-of-wages/article-1-general-occupations/section-2185-award-of-attorneys-fees/analysis?citingPage=1&sort=relevance

[5] https://www.elaborlaw.com/workplace-safety-complaint-retaliation-in-california.html

[6] https://www.courts.ca.gov/opinions/documents/S258966.PDF

[7] https://www.elaborlaw.com/california-claims-for-unpaid-wages.html

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