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New Amended Section 218.5 restricts recovery for attorney fees by prevailing employer only to claims brought in bad faith

The California Supreme Court decision in Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 274 P.3d 1160 held that Section 218.5 is a two-way fee-shifting provision and does not apply to claims to recover additional wages for the employer’s failure to provide meal and rest breaks, since nonpayment of wages is not the gravamen of a violation of the meal and rest break statute.

To avoid ambiguity, Section 218.5 is amended to provide that a prevailing employer may only recover attorneys’ fees if a trial court finds that the employee brought the wage action in bad faith.

The New Amended California Labor Code Section 218.5 reads as following:

§ 218.5. Actions for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions; award of attorney’s fees to prevailing party; exception; application of section

(a) In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action. However, if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith. This section shall not apply to an action brought by the Labor Commissioner. This section shall not apply to a surety issuing a bond pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code or to an action to enforce a mechanics lien brought under Chapter 4 (commencing with Section 8400) of Title 2 of Part 6 of Division 4 of the Civil Code. (Bold and Italics added.)

(b) This section does not apply to any cause of action for which attorney’s fees are recoverable under Section 1194.