Assessing One-Way Fee Shifting Provision

On July 26, 2012 in Arias v. Kardoulias (The California Court of Appeals – 2nd District, No. B234263), the court held that for the purposes of assessing a one-way fee provision, an award of zero does not occur when an employee's appeal of the Labor Commissioner's decision is dismissed on jurisdictional grounds.

In Arias, the plaintiff filed a claim against her employer seeking unpaid wages. She was awarded $6,319.69 by the Labor Commission. She appealed the decision but the superior court dismissed it as untimely. She made another appeal and the California Court of Appeals dismissed it as untimely. While this case was pending the defendant filed a motion requesting attorney fees under the one-way fee shifting provision of section 98.2(c). The plaintiff opposed this motion, arguing that fees were only recoverable under section 98.2(c) if the trial court had conducted a trial de novo. The trial court ruled the plaintiff's appeal unsuccessful and ruled in favor of the defendant and awarded the defendant in excess of $6,000 in fees. The plaintiff appealed.

The California Court of Appeals reversed the trial court's ruling. The court ruled that under section 98.2(c) the term appeal was not to be understood in the conventional sense, but rather to mean a new trial where the superior court hears the case de novo. The court pointed out that section 98.2(c) is only triggered on an unsuccessful appeal. Since the plaintiff's appeal was dismissed on jurisdictional grounds, the superior court could not determine whether she had the right to recover unpaid wages. Therefore the dismissal of plaintiff's claim did not equate to an award of zero which would have entitled the defendant to recover attorney fees under section 98.2(c).

If you have suffered from wage and hour claims, severance agreements, or retaliation, please do not hesitate to contact a Orange County Employment attorney today.

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