Labor & Employment Law Blog

To obtain fees under the Fair Employment and Housing Act (“FEHA”), a plaintiff must show they are a prevailing party.  The court assumed the trial court erred by concluding that Pollock was the prevailing party.  However, Pollock offered to provide the confidential settlement agreement in camera to substantiate that she was the prevailing party. Kelso argued that this was an impermissible augmentation of the record. The court held that all manner of information may be used to determine the prevailing party. That Pollock was ready and willing to present the settlement agreement and Kelso resisted was enough to indicate that Pollock had won something substantial in the agreement. 

The court found that attorney rates of $850 per hour were reasonable as was a multiplier of 1.8.  The court’s response to excessive hours was ignored since there was no record of how many hours defense attorneys spent on the case.

In Chavez v. California Collision, 107 Cal. App. 5^th 298 (2024), three employees of an auto body repair shop sued for various employment claims. Two plaintiffs accepted settlement offers under California's Code of Civil Procedure section 998.  On two out of the 11 causes of action pled by the third plaintiff, a jury awarded damages of $21,061, in an amount lower than two section 998 offers made to him.  Defendants filed a cost bill of $59,473.69 for costs incurred after the first section 998 offer.  Plaintiff opposed the motion as invalid under Labor Code sections 1194 and 218.5 and filed his own motion for attorneys’ fees and costs of $596,467.50.  The trial court awarded defendants attorneys’ fees and costs, offset this amount with what plaintiff recovered from the jury, found the plaintiff was entitled to recover nothing, and owed the defendants $33,152.

The Court of Appeals held the trial court erred in awarding costs to the employer under section 998.  The one-way cost shifting provisions of the Labor Code sections on unpaid wages override civil procedure section 998, which allows for an award of costs when a settlement offer is more favorable than the judgment. 

The court addressed whether plaintiffs could collect attorneys’ fees.  The plaintiffs took exception to the calculation of their hourly rate and number of hours worked, and the failure to apply a multiplier.  Because the case originally had three plaintiffs, the court requested plaintiffs’ counsel to segregate which time was spent on which client.  Plaintiffs’ counsel complied with this order and was awarded fees for only those portions that had been segregated.  As a result, the plaintiff who proceeded to try the matter was awarded $260 in attorney’s fees.  The plaintiffs’ requested a rate of $400 per hour, but the court determined based on the skill shown during trial, $200 per hour would be more appropriate.  The court also declined to apply a multiplier.

The court noted that plaintiffs’ failure to provide transcripts from the attorneys’ fees hearing undercut any abuse of discretion argument.  The court recognized that that trial court was not required to adopt the rate either counsel opined was the “market rate” and found the trial judge is the best to determine the value of professional services rendered.  The court held that a trial court may apportion fees even where the issues are connected, related, or intertwined.  The court also found that there was no abuse of discretion in not applying a multiplier.  Incredibly, the appellate court upheld the award of attorneys’ fee after trial of $260. 

In Villalva v. Bombardier Transit Corp.,108 Cal. App. 5^th 211 (2025), two employees brought claims for unpaid wages, lost a Berman hearing, and filed their claims de novo in Superior Court.  They won in court and received $140,000 in back wages and penalties and $200,000 in attorneys’ fees and costs.  The employer appealed the attorneys’ fees award, and the appeal was denied.  The court held that the Berman procedure penalizes parties who file an unsuccessful de novo superior court action by awarding attorneys’ fees and costs against that party. But the statute says nothing about a party who brings a successful de novo claim. Prevailing plaintiffs in superior court actions for unpaid wages are generally entitled to an award of reasonable fees and costs.

Employer Takeaways

1. Craft settlement agreements so there is not even a hint that a plaintiff is a prevailing party and negotiate attorneys’ fees so as not to leave it to the discretion of the judge.
2. Make sure a court reporter is present at all substantive hearings so that a transcript of the court’s reasoning is preserved.
3. Segregation of fees among multiple plaintiffs and allocation among multiple causes of action is critical to help minimize attorneys’ fees.
4. If defense counsel is going to attack plaintiff’s counsel’s hours billed as excessive, they need to be prepared to show the number of hours they billed.
5. Evidence to show plaintiff’s attorney rate is inequitable based on their experience and skill compared to that of the community is critical to lessen an attorneys’ fees award.
6. A multiplier is not only based on foregoing other work and contingent representation; the novelty and difficulty of a case as well as the skill displayed in the entire litigation process from discovery to trial presentation have an impact on the amount or even the application of a multiplier.
7. Section 998 offers may have limited utility in not only discrimination cases under FEHA but also on cases based on certain provision of the California Labor Code.

   This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

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