Labor & Employment Law Daily Wrap Up, ATTORNEYS’ FEES—Cal. App.: Award to employees who successfully appealed administrative denial of unpaid wage claims upheld, (Jan 24, 2025)

By Nadine E. Roddy, J.D.

Awards in such circumstances are authorized by the general attorney fees provisions of the California Labor Code (Code).

Employees whose unpaid wage claims were denied by the California Labor Commissioner (Commissioner) but who prevailed in a de novo trial in the superior court were entitled to attorney fees and costs under the general provisions of the California Labor Code, a California Court of Appeals has ruled. The superior court correctly determined that the specialized statutes governing administrative proceedings before the Commissioner did not preclude such an award (Villalva v. Bombardier Mass Transit Corp., No. D082372 (Cal. App. Jan. 21, 2025)).

Unpaid on-call time. Two train dispatchers brought state law claims for unpaid wages against their employer, a mass transit company. One weekend a month, the employees were “on call” and had to be available to respond to emergency calls, but they were not compensated for that time. Rather than going directly to court as they could have, the employees first sought relief from the Commissioner through the so-called “Berman” administrative process established by Labor Code §§ 98 et seq. This optional streamlined procedure was designed to “benefit employees with wage claims against their employers,” as the state supreme court had observed. The employees alleged that they were entitled to overtime wages under § 1194 and wage statement penalties under § 226 of the Labor Code for their unpaid on-call time, but the Commissioner denied their claims.

The employees then filed a request for de novo hearing in the state superior court, as permitted by the Berman statutes, and the matter proceeded as a standard civil action. They prevailed in a bench trial, with the court awarding more than $140,000 in back wages and penalties. They then sought attorney fees and costs incurred in the superior court proceeding under §§ 1194 and 226 of the Labor Code. The court awarded them attorney fees and costs in the amount of $200,000. The employer appealed the award of attorney fees and costs, arguing that such an award was not authorized by § 98.2 of the Berman statutes.

Berman attorney fees. The California Court of Appeal noted the employer’s argument that § 98.2(c) is the exclusive statute authorizing an award of attorney fees and costs in a superior court review of a Berman order. From this premise, the employer concluded that the employees in this case were not entitled to recover attorney fees and costs because § 98.2(c) authorizes only awards against unsuccessful appellants in de novo trials in superior court, not in favor of successful appellants. The court observed that the argument presented a pure question of law subject to de novo review.

The court then stated its disagreement with the employer’s premise. The Berman procedure does penalize a party—employer or employee—who files an unsuccessful de novo superior court action by awarding attorney 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 under §§ 218.5, 226, and 1194 of the Labor Code, and nothing in § 98.2 suggests that the legislature intended to make this remedy unavailable to employees who first attempt to obtain relief from the Commissioner through the expedited Berman process. Indeed, it would be an anomalous result if employees, who would have been entitled to recover prevailing party fees and costs under §§ 218.5, 226, and 1194 if they had filed a civil action directly in superior court, could not do so if they had elected to pursue the Berman process before ultimately prevailing in superior court under § 98.2.

Further, the employer’s argument contradicted the only published authority on point—the court of appeal’s decision in Eicher v. Advanced Business Integrators, Inc., (2007) 151 Cal.App.4th 1363. The court declined the employer’s invitation to reconsider the Eicher holding, noting that the state supreme court authority cited by the employer as impliedly overruling Eicher did not present the same or even a tangentially related issue.

For these reasons, the court affirmed the trial court’s award of attorney fees and costs to the employees.

The case is No. D082372.

Judge: Buchanan, M.

Attorneys: Clarice J. Letizia (Letizia Law Firm) for Mark Villalva and Bobby Jason Yelverton. Bruno W. Katz (Wilson Elser Moskowitz Edelman & Dicker) for Bombardier Mass Transit Corp.

Companies: Bombardier Mass Transit Corp.

Cases: AttorneysFees WageHour WorkingTime Procedure StateLawClaims CaliforniaNews