Existing California law (Labor Code §218.5) awards attorneys’ fees to the successful party in any action brought to recover unpaid wages, fringe benefits, or pension fund contributions. Thus, if an employee brings an action to recover unpaid wages and wins, that employee gets his attorneys’ fees paid by the employer in addition to recovering the wages due. Conversely, if the employee loses, that employee would be required to pay the employer’s attorneys fees.
But not anymore.
On August 26, 2013, Governor Jerry Brown signed SB 462 amending California Labor Code §218.5 to limit an employee’s liability for attorneys’ fees only when the Court finds that the employee brought the action “in bad faith.” No longer is it sufficient simply for the employer to prevail in the lawsuit. Now, in order to get attorneys’ fees against the losing employee, the employer will have to convince the Court that the employee’s claims were frivolous and/or brought solely to embarrass or harass the employer.
The new law imposes no reciprocal obligation on a successful employee. The successful employee still gets his attorneys’ fees simply by being the prevailing party. The successful employer, however, has an additional burden beyond simply prevailing in the case — that is, the employer has to show the employee’s “bad faith.” This is a very tough standard for the employer to meet. The practical effect will be that successful employers will almost never get attorneys’ fees against their employees but successful employees will almost always.
SB 462 was sponsored by Senator William W. Mooning (D-Carmel). You read the full text of the new law here.