Defense Allocation Required on Remand--First Published Decision Interpreting Kirby v. Immoos Fire Protection.
To our knowledge, Aleman v. AirTouch Cellular, Case No. 231142 (2d Dist., Div. 2 Sept. 20, 2012) (published) is the first published decision to apply Kirby v. Immoos Fire Protection, Inc., 53 Cal.4th 1244 (2012) [discussed in our May 1, 2012 post] given that this appellate decision was an opinion upon transfer from the California Supreme Court after Kirby was decided.
What happened in Aleman, a wage/hour putative class action, was that plaintiff class representatives were defensed via a summary judgment on split shift and reporting time claims. As a result, AirTouch moved to recover fees under Labor Code section 218.5, with the trial court awarding defendant $146,000 in fees against one plaintiff and $140,000 in fees against the second plaintiff.
On appeal, after considering the impact of Kirby, plaintiffs beat fee entitlement on one claim but lost on the other, requiring a remand to allocate defense costs on the claim giving rise to fee entitlement.
The appellate court determined that under Kirby Labor Code section 1194 (which does not allow fee shifting against plaintiffs) applies to unpaid minimum wage or overtime compensation, while section 218.5 (which does authorize fees to a prevailing party, including defendants) applies to action brought “on account of” nonpayment of wages (but not for actual nonpayment of wages). It then applied these distinctions to the split shift and reporting time claims.
The split shift claim was found to be a minimum wage regulation, so that it is governed by section 1194 and did not give rise to plaintiff fee exposure.
A different result was reached on the reporting time claim. A reporting time claim is not designed to seek minimum or overtime wages, because the compensation is at the employee’s regular rate of pay. Section 218.5 applies because it brought “on account of” nonpayment of wages, such that the defense was entitled to fee recovery on this claim. However, because no apportionment of fees was made by the lower court, the matter had to be remanded to do so between the two claims.
Cartoon shows labor leader John L. Lewis asking Father Time for his overtime card on Leap Day. 1940. Library of Congress.