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Attorneys

There Can Be Two “Prevailing Parties” in a Single Wage & Hour and Equal Pay Act Lawsuit

October 15 2015

By: Beth West

On October 14, 2015, the California Second District Court of Appeal held in Sharif v. Mehusa, Inc.  that both the employee and the employer can be deemed “prevailing party” for purposes of recovering attorneys’ fees under the Labor Code.  Plaintiff, Mahta Sharif, brought an action against her former employer, Mehusa, Inc., for unpaid overtime (Lab. Code, § 1194), unpaid wages (Lab. Code, § 201), and violation of California’s Equal Pay Act (Lab. Code, § 1197.5).  She prevailed on her Equal Pay Act claim with the jury awarding her $26,300. Mehusa prevailed on Plaintiff’s overtime and wage claims.  Plaintiff filed a cost memorandum and was awarded her costs. She also filed a motion for attorney fees in the amount of $280,432 under Labor Code section 1197.5(g) as the prevailing party on her Equal Pay Act claim. Plaintiff’s attorney fees request consisted of a lodestar amount of $140,216 and a multiplier of two.  Mehusa filed a motion for attorney fees and costs under Labor Code section 218.5 in the amount of $36,982.24 as the prevailing party on Plaintiff’s wage claims.  Mehusa estimated that 75% of defense counsel’s time was spent defending against Plaintiff’s unsuccessful wage claims.

The trial court ruled that Labor Code section 218.5 is a two-way fee shifting statute that requires the award of reasonable attorney fees and costs to the prevailing party on wage claims.  Relying on Aleman v. AirTouch Cellular (2012) 209 Cal.App.4th 556, 582-583, the trial court further ruled that when there are multiple claims asserted in an action, to be a “prevailing party” under section 218.5, a defendant need not prevail on all of the claims, but only on those claims to which section 218.5 applies.  Thus, after determining that only $35,054 of her attorney’s fee request was related to her successful Equal Pay Act claim, the trial court awarded Plaintiff $35,054 for her attorney’s fees under Labor Code section 1197.5. The trial court also awarded Defendant $31,334.81 under Labor Code section 218.5 for its attorney fees in connection with Plaintiff’s unsuccessful wage claims, and then offset the awards for a net award to Plaintiff of $3,709.19.

Plaintiff appealed contending that she was the sole prevailing party on a “practical level” and as that term is defined in California Code of Civil Procedure section 1032(a)(4). Accordingly, Plaintiff argued that the trial court erred in awarding Mehusa its attorney fees and costs. In affirming the trial court’s decision, the Appellate Court held that a net monetary award to a party does not determine the prevailing party when there are two fee shifting statutes involved in one action.  Instead the court explained, when there are two fee shifting statutes in separate causes of action [as there were in this case – Labor Code sections 1197.5 and 218.5], there can be a prevailing party for one cause of action and a different prevailing party for the other cause of action.