Employment, Lodestar, Multiplier: Employer Not Winning Total Defense Victory In De Novo Sup. Ct. Appeal Of Labor Comm. Award Properly Hit With Adverse Fee Award Of $86,160 Even Though Labor Comm. Award Only $4,250 (Rev. Down To $2,250 By Court Of Appeal)

Limited Success Argument Does Not Diminish Fee Recovery In This Particular Context.

            In Nishiki v. Danko Meredith P.C., Case No. A147733 (1^st Dist., Div. 4 Aug. 1, 2018) (published), an employer suffered an adverse Berman hearing award before the Labor Commissioner for waiting time penalties for failure to deliver a check for final wages to the tune of $4,250 although employee lost two other claims for unpaid vacation and rest period premium wages (with the rest period claim being by far and away the largest claim). The employer did a de novo appeal to the superior court, which also awarded $4,250 for waiting time penalties. Employer should have stopped after the Labor Commissioner award, because the superior court awarded employee $86,160 in attorney’s fees (out of a requested $90,900) under Labor Code section 98.2(c). Although there is a very commonsense discussion of waiting time penalties of use for employment practitioners, with the appellate court reducing the penalty award down to $2,250, the fee award was upheld by the 1/4 DCA panel.

            Under section 98.2(c), an employee successful in a de novo appeal, obtaining an amount greater than zero, can obtain the full costs of litigation, including reasonable attorney’s fees, against the employer. The statute is designed to act as a disincentive to appealing the Labor Commissioner’s decision. Employer argued that employee’s fee award was too much because employee did not prevail on two of her claims. This argument was rejected based upon the very particular “disincentive” rationale of section 98.2 and above zero success language of the statute—with the appellate court candidly stating that “defendant has only itself to blame” by appealing the Berman hearing award. The superior court’s award of a 1.5 positive multiplier presented no problem given the contingency risk taken by employee’s counsel. Finally, $650 per hour for a San Francisco 20-plus decade practicing attorney was not an unreasonable lodestar hourly rate.

            BLOG OBSERVATION—An employer needs to carefully consider the appeal of a Berman hearing award, especially where it is in the range here. The employer must appeal quickly, post a full bond or cash undertaking for the award in quick fashion (with the period being jurisdictional), and new claims can be raised by the employee in the de novo hearing—not to mention the fee-shifting disincentive repercussion!