When Can Employees Recover Attorney’s Fees in Employment Lawsuits?

Employment lawsuits can be complex, emotionally draining, and financially burdensome for employees. Fee-shifting provisions have revolutionized the accessibility and effectiveness of employment litigation by allowing successful plaintiffs to recover attorney’s fees from the losing party.

In the United States, the default rule is that each party pays for their own attorney, but fee-shifting provisions enable the prevailing party to recover attorney’s fees and litigation costs. These provisions encourage employees to assert their rights without fear of financial repercussions, ensuring access to competent legal representation.

When Can a Party Recover Attorney’s Fees?

In California, attorneys’ fees can only be recovered if specifically allowed by statute or contract. Without a law or agreement stating otherwise, both the winning and losing parties are responsible for their own attorney’s fees.

Fee-Shifting Provisions in California Employment Law

FEHA (Fair Employment and Housing Act)

The fee-shifting provision for a FEHA claim is a two-way provision, meaning the court has the discretion to award attorney’s fees to the prevailing party. However, a prevailing defendant may only recover attorney’s fees if the plaintiff’s claim is deemed “frivolous, unreasonable, or groundless.” (Gov. Code, § 12965 (c)(6))

Labor Code Section 1194

California Labor Code Section 1194 allows recovery of attorney’s fees for a prevailing employee in an overtime or minimum wage action but does not allow a prevailing employer to be awarded attorney’s fees.

Labor Code Section 218.5

California Labor Code Section 218.5 is a limited two-way attorney’s fee provision that allows the court to award attorney’s fees to a prevailing party in actions for unpaid wages. A prevailing employer can only recover fees if they prove the employee acted in bad faith.

Labor Code Section 2802

California Labor Code Section 2802 provides that an employee is entitled to recover attorney’s fees incurred while enforcing rights related to necessary expenditures made in the discharge of their duties.

Naranjo v. Spectrum Security Services, Inc.

This case allows employees who prevail on rest and meal break violations to recover attorney’s fees under Section 218.5. The court ruled that premium pay for rest and meal break violations constitutes “wages.”

Labor Code Section 1197.5

Under California Labor Code Section 1197.5, an employee who receives less than they are owed under the Equal Pay Act can recover reasonable attorney’s fees.

Attorneys’ Fees by Contract

If a contract includes an attorney’s fee clause, the winning party can seek those fees. However, arbitration agreements cannot be used to avoid statutory fee-shifting requirements where statutory law, such as Labor Code Section 218.5, requires bad faith for employer recovery.

Understanding fee-shifting provisions is crucial when determining the financial viability of pursuing a case. At TONG LAW, our experienced employment attorneys are here to help employees enforce their rights.