Employment, Costs: Appellate Court Directive That “The Parties To Bear Their Own Costs On Appeal” Does Not Preclude Award Of Appellate Fees

Directive Only Deals With Appellate Routine Costs, With Berman Hearing Fee-Shifting Provision Allowing For Recovery Of Appellate Fees For Prevailing Party Work.

            This case deals with a Berman hearing—an employee’s hearing before the California Labor Commissioner for unpaid wages. Employers gripe because, if a de novo trial is sought in the superior court, they must post an undertaking for the full amount of the award within a short time, they bear responsibility for de novo trial and potential appeals fees should they lose, and the employee can raise other claims not strictly within the Labor Commissioner demand. Well, this case also shows the risk of appealing an adverse Labor Commissioner award in employee’s favor—escalating fees of an astronomical nature. The whole dispute was over a “short” $300 difference in unpaid wages (we are not kidding) with employer fighting all along the way and eventually being assessed with attorney’s fees totaling $88,785, not to mention other statutory penalties and interest. (The appellate fee award of $57,420 was nearly 200 times the $300 amount.) Employers and their counsel need to pay attention to the result here, even though it was unpublished.

            In Stratton v. Beck, Case No. B287001 (2d Dist., Div. 4 Dec. 7, 2018) (unpublished), employee challenged a $300 “short” wage payment by an employer, winning $6,060.96 in the unpaid wages, liquidated damages, interest, and statutory penalties before the Labor Commissioner. Employer appealed and requested a trial de novo in the superior court, and the situation only got worse. The trial court awarded employee $6,778.85 plus $31,365 in attorney’s fees, with the fee determination affirmed in a prior published appellate decision. In doing so, the appellate court directed the parties “to bear their own costs of appeal in the interest of justice.” Employee then filed a motion to recoup appellate attorney’s fees, seeking a lodestar of $57,420 plus a 2.0 positive multiplier. The lower court granted an additional award of appellate fees of $57,420, the lodestar (but with no positive multiplier enhancement).

            Employer appealed the appellate fee award, with no change in result. He first argued that the prior appellate directive of “bearing own costs” means no fees could be awarded, but this was doomed because: (1) appellate fees under the Berman hearing fee shifting provision (Labor Code section 98.2(c)) are authorized for appellate work (Eicher v. Advanced Business Integrators, Inc., 151 Cal.App.4^th 1363, 1384 (2007); Nishiki v. Danko Meredith, APC, 25 Cal.App.5^th 883, 899-900 (2018)); and (2) CRC 8.278(d)(2) expressly provides costs do not include attorney’s fees with respect to appellate costs language—which is different than trial court “costs” language (Butler-Rupp v. Lourdeaux, 154 Cal.App.4^th 918, 925 (2007), found to be indistinguishable with respect to resolving this appellate cause).

            Although arguing that the lower court has discretion to deny fees to a matter which could have been a limited civil matter, employer’s problem was that he did not bring this issue up such that it was waived. As far as the amount of the award, the lower court did deny the multiplier request, so no abuse of discretion was shown; $300 became $89K-plus!