California wage and hour law is a convoluted landscape when it comes to determining when a prevailing employee or employer can recover attorneys’ fees and costs. Under California Labor Code Section 1194, an employee who wins a lawsuit against her employer for nonpayment of overtime compensation is entitled to recover reasonable attorneys’ fees.
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An employer that successfully defends against such a claim, however, is not. This unique “one-way fee-shifting” provision is an exception to the normal “American rule” that each party bears its own attorneys’ fees.
This American rule governs many claims for violations of the California Labor Code, including claims for missed meal periods. Yet, the California Legislature has given claims for overtime compensation “special treatment” and views them as important to a “stable job market.”
In turn, California courts have recognized that this “one-way fee-shifting” provision in favor of employees recognizes the public policy of protecting an employee’s right to file an overtime claim without facing the prospect of financial ruin. If an employer was able to recover its attorneys’ fees incurred in defending against an overtime claim, employees would be discouraged from filing otherwise valid overtime claims.
Read on for a recent case that exemplifies the issue—when an employee’s wage and hour claim against P.F. Chang’s failed.