KIRBY v. IMMOOS FIRE PROTECTIONAppellants' Reply Brief on the MeritsCal.May 10, 2011SUPREME COURT FILED Case Number 8185827 MAY 10 2011 Frederick K. Ohirich Clerk IN THE SUPREME COURT OF THE STATE OF CALIFORNIA Deputy Anthony Kirby,et al., Plaintiffs and Appellants VS. ImmoosFire Protection, Inc., Defendant and Respondent Appeal from a Decision of the Third Appellate District, Case Number C062306 APPELLANTS’ REPLY BRIEF ON THE MERITS LAW OFFICES OF ELLYN LAW OFFICES OF MOSCOWITZ,P.C. SCOT D. BERNSTEIN, Ellyn Moscowitz (SBN 129287) A Professional Corporation Jennifer Lai (SBN 228117) Scot Bernstein (SBN 94915) 1629 Telegraph Avenue, 101 Parkshore Drive, Suite 100 Fourth Floor Folsom, California 95630 Oakland, California 94612 Telephone: (916) 447-0100 Telephone: (510) 899-6240 Facsimile: (916) 933-5533 Facsimile: (510) 899-6245 Attorneys for Plaintiffs and Appellants ANTHONYKIRBY AND RICK LEECH,JR. Case Number 8185827 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA Anthony Kirby,et al., Plaintiffs and Appellants VS. ImmoosFire Protection, Inc., Defendant and Respondent Appealfrom a Decision of the Third Appellate District, Case Number C062306 APPELLANTS’ REPLY BRIEF ON THE MERITS LAW OFFICES OF ELLYN LAW OFFICES OF MOSCOWITZ,P.C. SCOT D. BERNSTEIN, Ellyn Moscowitz (SBN 129287) A Professional Corporation Jennifer Lai (SBN 228117) Scot Bernstein (SBN 94915) 1629 Telegraph Avenue, 101 Parkshore Drive, Suite 100 Fourth Floor Folsom, California 95630 Oakland, California 94612 Telephone: (916) 447-0100 Telephone: (510) 899-6240 — Facsimile: (916) 933-5533 Facsimile: (510) 899-6245 Attorneys for Plaintiffs and Appellants ANTHONY KIRBY AND RICK LEECH,JR. TABLE OF CONTENTS INTRODUCTION.........:ceesccessceseseeeseeeccceeessssessrseseceessesssaesassneeeseessnesseeeesets i ARGUMENT....0...ceecceecceecceseteeseeecseeensssesseeseusesssseseseaeecesaseneesnensasesnerseeneneesgs 2 I. ATTORNEY’S FEES MAYNOT BE AWARDED UNDERSECTION218.5’S TWO-WAY FEE PROVISION FOR CAUSES OF ACTION ALLEGING MEAL AND REST VIOLATIONS UNDERSECTION 226.7; INSTEAD, SECTION 1194’°S ONE-WAY FEE PROVISION APPLIES. ........ccccesceseeseereees 2 A. Section 218.5 Does Not Apply To Statutorily- Required Meal And Rest Premium Pay..............:csscsseseseeeees 3 1. The Statutory Language, Regulatory Context, And Case Law Show That Section 218.5 Applies To Contractual Wages Onlyun... eeeceeecesesseesseeessessscersecensseeseseneeserenses 3 2. Section 218.5’s Legislative History Demonstrates That The Legislature Did NotIntend Two-Way FeeShifting To Apply To Section 226.7 Claims..............:cccesseeeseeeees 9 a. Immoos Misreads The Legislative History Of 1999-2000 00... ee eeceseeeseeeeseeeeeeees 9 b. The Legislature Did Not Abandon One-WayFee Shifting, Nor Did It Intend For Two-WayFee Shifting To Apply WhenIt Deleted Section 226.7(c) And Fundamentally Altered The Meal And Rest Remedy From A Penalty To Pay ....... ee eeeecssceesseessteeneeeneesensees 12 TABLE OF CONTENTS c. ImmoosFails To Show How The Legislative History Of 1999-2000 Supports The Application Of Section 218.5 To Section 226.7 Cai2000.0... ceeceeeeeeeecrececcesseecosseceseesensaceeseanees 14 3. Immoos’ Proposed “Three-Fold Purpose” Of Section 218.5 Should Be ReJOCtedseeeeccceeeneenetereceeeeeessesssesssceseesssenasssecesneats 16 B. Because Section 218.5 Does Not Apply To Section 226.7 Claims, Section 1194 Applies................ 18 C. California Public Policy Bars Section 218.5’s Application To Meal And Rest Claims. ............:.ceeseeeseeees 23 Il. “ACTION” IN SECTION 218.5 MEANS A CIVIL ACTION, NOT A CAUSEOF ACTION ..... cece cccceeeeseeseeeseeeeeseeens 24 A. Kirby’s Interpretation Of Section 218.5 Will Not Harm Workers As Immoos Claims...........ccccscessseeeees 25 B. Courts Can Manage Attorney’s Fees Issues Where Causes OfAction Are Joined With Section 1194 Claims.0..... ee eee cescessesseeeeeeeseesscseeesseseneeeesees 26 C. The Legislature And This Court Have Determined That The Term “Action” Refers To A “Lawsuit” oo... ceccceccsseceseeseeseeeeaeeedessenseeeessesssecseseeseeseesseenees 26 CONCLUSION o.oo ceceeceesecseeeneeeeteceeetsssneaeeaceseessecesseeasensaseseneeenseenaeenseeees 29 il TABLE OF AUTHORITIES Page California Cases Amaral vy. Cintas Corp. No. 2 (2008) 163 CalApp.4th L157 oieeeecssssesseseesecseenesessessesseesseees 20 Aubry v. Tri-City Hospital Dist. (1992) 2 Cal4th 962 oo.cessscesesserstsessesesessesseseessesseseessaseneeeens 6, 7 California Grape & Tree Fruit League v. Industrial Welfare Com. (1969) 268 CalApp.2d 692.......ccceccseescessecseneseetsnsseneneneneseeneeeetees 16 Contractors Labor Pool, Inc. v. Westway Contractors, Inc. (1997) 53 Cal.App.4th 152oeeecesessseseeseesseeeseseessesseneeeneees 26 Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163 oo. eececeesesssessescecesessssessscsseeseeessecsssneseaeenes 3 County ofSan Diego v. Alcoholic Beverage Control Appeals Board (2010) 184 Cal.App.4th 396oecsssccessceseserseeseesteensessseseeeees 12 Cuadra v. Millan (1998) 17 Cal-4th B55 i ecsccsccetseeeececeeseceeeeeeerseeneessesseeeneaeanssseeseeseneeens 3 Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383 occssseceeesseeeeseseeseeeeeseeseeneeees 17 iil TABLE OF AUTHORITIES Page Davis v. Ford Motor Credit Co. (2009) 179 Cal.App.4th 581 ooccccsceseceseerssseeseeeesseesseessenseaes 4 Earley v. Superior Court (2000) 79 Cal.App.4th 1420 occceseeeecseeseeesseeseeseeteenee passim Franco v. Athens Disposal Co., Inc. (2009) 171 Cal. App. 4th 1277 oo.seeesseseeteessecsneensensenes 18 Frost v. Witter (1901) 132 Cal. 421 eeeeee cneeeeeeeseeseeesseceeeesseesseesesesteseneas 27, 28 Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal4th 554 occecesssseseeceseseesesenseneeseeeesseeseeesseseees 6 Gentry v. Superior Court (2007) 42 Cal.4th 443 occeceeeeeesttt6,7 Home Depot USA, Inc. v. Superior Court (2010) 191 CalApp.4th 210oceceeeeeeseesreeeeteeeeneeneeeeeeees 18 In re Shieh (1993) 17 CalApp.4th 1154ceccsscssseeeneeseseeesessseetsessenees 25 Jones v. Tracy School Dist. (1980) 27 Cal.3d 99 oiecee cceceseesecsecesersseescnseesesssessessseesseseeeseenees 24 iv TABLE OF AUTHORITIES Page Kerr's Catering Service v. Department ofIndustrial Relations (1962) 57 Cal.2d 319 ooo cecccesrecssetesreesteeeesuseresseesssasesresssseseeeees 23 Lazarin v. Total Western (2010) 188 Cal.App.4th 1560oeeee ccseesssesseeseeserseeesseeseneeeens 4 Luv. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 592 oooceeesceeecenceceeeeeescesaeeseeessessseeseseeeeeneees 28 Lusardi Construction Co. v. Aubry (1992) 1 Cal4th 976 oo. ececeeceseeseeeeseetseeeesseeseeeseeessesenseeseeeeseraeeeea 6 Marathon Entertainment, Inc. v. Blasi (2008) 42 Cal.4th 974 oooccceceeseeeneeseeersesseeeessseeseseeeeseesseesseeseaees 21 Martinez v. Combs (2010) 49 Cal.4th 35 ooo.ccceeccscerecesceeecssessssesessessesessesssesseenseseaeee 22 McGann v. United Postal Service, Inc. (2011) 192 Cal.App.4th 1425 oooeeececceeseesseecnesenseeeseeeee passim Mejia v. Reed (2003) 31 Cal.4th 657 oo... cceceesseesceseseneceeeeeeesesessecseeseecsseereeees 20, 23 Metropolitan Water Dist. v. Whitsett (1932) 215 Cal.400 ooeccceeeeseeeseeeeeceseessesssnsseseeeseessenseeesaeeeneeeees 20 TABLE OF AUTHORITIES Page Moyer v. Workmen’s Comp. Appeals Board (1973) 10 Cal.3d 222 .oocieieeeeescesesessssescessssesserseresesessseneessesaeeseenes 19 Murphy v. Kenneth Cole (2007) 40 Cal.4th 1094occcccseneeeeeseeeneeseeeeeseeeeeeees passim Nassifv. Municipal Court (1989) 214 Cal.App.3d 1294... eeccsesecesesseesseseeeeessecssesseensensenee 28 O.G. Sansone Co. v. Department ofTransportation (1976) 55 CalApp.3d 434...eeecessesscesssssserserseseessssseeeeseenseeee 20 Palmer v. Agee (1978) 87 Cal.App.3d 377.0... ccesceeseceseesssssssseeseesseeseseeseeesaeeseeeserenes 27 People v. Hwang (1994) 25 Cal-App.4th 1168 ooeeceecssessesseeteesseseeeeneseeeseees 20 Prachasaisoradej v. Ralphs Grocery Company, Inc. (2007) 42 Cal.4th 217 cececceeceececeesscescssesseseeeseensssasensenseceensseseeaee 5 Road Sprinkler Fitters v. G & G Fire Sprinklers, Inc., 102 Cal.App.4th 765 ccccccscsccsesseececeesssssessessesassseceeeseeseeeseesenas 20 Sampson v. Parking Service 2000 Com., Inc. (2004) 117 Cab.App.4th 212 oiecseceeseeneeeteesseeseeteeneeeeenees 28 vi TABLE OF AUTHORITIES Page Schachter v. Citigroup, Inc. (2009) 47 Cal.4th 610 oo... ccecceeceecsecessereneeeeseeeesesusessssesessssassesseseee 6 Serrano v. Priest (1977) 20 Cal.3d 25 occ cecccccceerestceeeeeeceeeeeseseeessteceeseeseeeseereesaseeees 26 Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659 ooeeeeeeecseceesesesseeseessssessessesseesiens 6, 15 Turnerv. Association ofAmerican Medical Colleges (2011) 193 CalApp.4th 1047 ooeeetsenseesseecseesenees 4, 23, 26 California Court Of Appeal Third District Kirby, et. al. v. Immoos (filed June 25, 2009, Court of Appeal No. C062306) [mnonpub. Opn]...cece eeeeeeseceeeeeeecessesaeseeesesseeeeseesseessueeasssseaseaesesnes 5 United States District Court For The Northern District Of California Kline v. United Parcel Service, Inc (N.D.Cal. June 22, 2010, No. C09-00742 SI) 2010 U.S. Dist. LEXIS 69623 oooc.eeeceeceeeeeesseeceseececeeeeesceceeeeecsesessssseasesescesuarseassessenes 26 Lopez v. United Parcel Service, Inc. (N.D. Cal. Dec. 14, 2010, No. C 08-05396 SI) 2010 U.S. Dist. LEXIS 136352 oo. eccecceeeeeseeessseseeeeeeeeseseseeecenessaeseseseesessceesesaseeeeees 26 Vii TABLE OF AUTHORITIES Page United States Court Of Appeals For The Ninth Circuit Harris v. Maricopa County Superior Court (9th Cir. 2011) 631 F.3d 963...cccseeeeeeseeeeseeseeneeseesneteeeneenes 17 One Corp. v. City ofBerkeley (9th Cir. 2004) 371 F.3d 1137eeceessceeeeseeeeeseeseeseenesasennees 20 Supreme Court Of The United States Gustafson v. Alloyd Co. (1995) 513 US. SO] eeeee ceeceseeceecsseseessescseenseseessesseeaeesseenenseseesaes 8 Pattern Makers’ League ofNorth America, AFL-CIO v. National Labor Relations Board (1985) 473 U.S. 95 ccccssssssessssscsssssvsessesscsssssssssveseeseccesesnsnuneseeseeeeeennneses 9 California Civil Procedure Code. Civ. Proc. § 22 .ceceeesceeseesereccsseessseessssssseseeeenseesssessaeeneeeseeseeeseeaeeey 28 California Labor Codes Cal. Labor Code § 90.5 ooo... ceeeccceseeeecssssecsseceresesecnsseseresneseneneeeenseesseeeenes 23 Cal. Labor Code § 98.2 oo... ccccecesccescesseseesseseesssssensecsasesseessesaesessesseeeseneaes 15 Cal. Labor Code § 200 wo... cccceeesscecenecereseeesseseacsesssecsseesseeneesseesnessaneanes 3,5 Vili TABLE OF AUTHORITIES Page Cal. Labor Code § 218.5 oo... cece eescscssseensesssenssesenaseesesecsneessesesseerenasoonaes passim Cal. Labor Code § 223isinbeseeaecesaeceecescaceeeesecauaeeesessgers 6 Cal. Labor Code § 226.7 ......ccesccesccsssssessscsseesseeesesensenseneeeneaeeaseensaeens. passim Cal. Labor Code § 227.3 .....escccscesescesseeeessersseeesssesseeseaneensesssaeeeneeneaeensaeens 6, 18 Cal. Labor Code § 510 wo... .eeeeeeseeeeseeeesseenseeeseseeeesssaseenseeessnaeneseenees 7,19, 21 Cal. Labor Code § 512 oo... ccececcceecccseeeeseeeseessseseseseeaeeensensensenaesencaeeeeereseetees 8 Cal. Labor Code § 516 .......csceccesscccsseeessecssesesseesseeessseceeessanensneensnesseeesnserens I Cal. Labor Code § 1193.6 ...cecceeceesceseessesseceesseensseeseeeneecssenessensesseeeerenerseees 19 Cal. Labor Code § 1194...eceuesssesssns . eaceeeeneeeeeseaeeeeaueeeeaes passim California Code Of Regulatons Cal. Code Regs.,tit. 8, § 11000 oo...eeeeeseeteeseeeeessovseenesnneeesceaeeensetnaes 20 California Constitution Cal. Const., Art. TV § 9 occeeeccecessseceesesessseeenseeeeeseeeseneneensnes sesessesennnanen 21 United States Codes 29 U.S.C. § 207(a)..ccccccccesceeeeeceeceeecsetesscneseeseeseeeasenessenesennesianeeesenseensaseasons 21 ix TABLE OF AUTHORITIES Page Legislative History Assembly Bill No. 1652 (1999-2000 Reg. Sess.) as amended September 8, 1999... ccccscsscsesesesesseeseseaseeneeseseseceaseneseneeeesseeaeseesasenees 10 Assembly Bill No. 1652, Assembly Final Hist. (1999-2000 Reg. SSS.) ....sccesceccsssessescsseseessssceseseesessseseacnessaeeseceneseneesenesaeecesecesenaseneseteesese 10 Assembly Bill No. 2509 (1999-2000 Reg. Sess.) as introduced February 24, 2000 0...cee cessssseseeeeeeeseesseeseeseessneeneeeesesserseeeees 10 Assembly Bill No. 2509 (1999-2000 Reg. Sess.), as amended August 25, 2000 .0.....eececescssscccseceresesseessansneeensesenesseeaeeecseeeecosnessaeeneesseeeaegs 11 Assembly Bill No. 2509, Assembly Final Hist. (1999-2000 Reg. SOSS.) ...esccescescceseessssscseeseeseesesensesreesesssesneneeseesseenesseneseeeseneenensaesnsseeessoss 12 Assembly Bill No. 2857 (1999-2000 Reg. Sess.), as amended August 25, 2000 oo.cccccsseccceesssestesaseesseesseesnasseesaesecsesseseressrseeeessaseates 11 Assembly Bill No. 2857 (1999-2000 Reg.Sess.), as amended August 30, 2000 oo. ececcsscscscsssssesesessesseeeeseesetenseaseceneaserenecssnesnenesaenessenaes 12 Assembly Bill No. 2857, Assembly Final Hist. (1999-2000 Reg. S€SS.) ...cccceccscsscsssseseesessesessesssesseeeneseasesseseenssseseesessenseaeseesaseeesesensneeneatees 12 Assembly Bill No. 633 (1999-2000 Reg. Sess.) as introduced February 19, 1999 oo.eeccccccscssssessssesesseessseesneeseenessseseeseeennenseeesneeseeeatens 10 TABLE OF AUTHORITIES Assembly Committee on Labor and Employment(April 12, 2000) on Assembly Bill No. 2509 (1999-2000 Reg. Sess.), introduced February 24, 2000 .........ccsscsscscecceseesseenseseeeneeeneeneetanenes Assembly Committee on Labor and Employment (June 26, 1986) on Sen. Bill No. 2570, as amended June 17, 1986 ................ Assembly Committee on Labor and Employment, (April 7, 1999) on Assembly Bill No. 633 (1999-2000 Reg. Sess.), as amended March 25, 1999 uu....ccccccccsscecssssssseccceseeccsseneeesonsessacuaeeceeeeees Concurrence in Senate Amendments, Assembly Bill No. 2509 (1999-2000 Reg. Sess.), as amended August 25, 2000... Concurrence in Senate, Assembly Bill No. 1652 (1999-2000 Reg. Sess.), as amended September 9, 1999.0...eeseenesseeneeeseeseten Public Hearing before State of California Department of Industrial Relations, Industrial Welfare Commission (May 5, 2000). sessecescsecessesevsscesssssssssesssessssssscessssssssasesessessessssnnunssseeeecessnnueteesee Senate Rule Committee Assembly Bill Analysis, Third Reading on Assembly Bill No. 2509 (1999-2000 Reg.Sess.), as amended August 25, 2000.00.00... cecsseessecreeeneenesseesaseeereaseeeeerees Senate Rule Committee, Third Reading on Assembly Bill No. 2857 (1999-2000 Reg. Sess.), as amended August 25, 2000............ Stats. 2000, Ch. 876 [Assembly Bill No. 2509.00... eeeeeceseeseeeeeees xi Page eeesseees 11 eseeeeees 16 seveeeeees 10 seceeseees 14 eseeceees 14 seceeseees 11 eveeeeees 13 seceeseees 13 sesateneeess 9 TABLE OF AUTHORITIES Page Statutes of 1999, Chapter 554, Assembly Bill No. 633 0.0... eee eeeeseeeeee 10 Miscellaneous Black’s Law Dict. (9th ed. 2009) oo...cee cecccessesteceseeeeeeceeeeeeeeeeeeeateaesersssesesseasseeeseeens 28 Pomeroy on Pleading and Practice § 453.00... ceccssseesseeeeseeesseeenseeseenees 27 Xli INTRODUCTION Kirby does not seek to transform Labor Code section 1194! into a “refuge for plaintiffs to bring any and all wage actions” as Immoosfears. (Immoos’ Answer Brief on the Merits (“IAB” or “Answer’”), 41-42.) Rather, Kirby seeks to protect employees forced to vindicate their rights under the Labor Code from ruinous employer attorney’s fees. Here, an employer demanded more than $143,000 in fees from two construction workers earning an average of $16.50 per hour who simply sought compensation owed for working through afternoon rest periods. Allowing employer fee demands like this one would chill the enforcement of meal and rest period requirements and minimum labor standards. It is inconceivable that the Legislature that forbade the Industrial Welfare Commission (“IWC”) from weakening meal period requirements (section 516) would provide unscrupulous employers with such an obvious way to chill the enforcement of these core remedial worker protections. This appeal is not about the scope of section 1194. Instead, it is about the scope of section 1194 in relation to the scope of 218.5. Both of the issues on which review was granted relate to the same inquiry: whether the Legislature intended that employees who sue their employers unsuccessfully for violations of section 226.7 are subject to potentially ruinous liability under section 218.5 for the attorney’s fees generated by their employers in those failed suits. California’s statutes, their legislative history, California’s case law and strong public policy considerations all point to the same answer: No. ' All section references are to the California Labor Code unless otherwise stated. ARGUMENT I. ATTORNEY’S FEES MAY NOT BE AWARDED UNDER SECTION 218.5°S TWO-WAY FEE PROVISION FOR CAUSES OF ACTION ALLEGING MEAL AND REST VIOLATIONS UNDER SECTION226.7; INSTEAD, SECTION 1194’°S ONE-WAYFEE PROVISION APPLIES Immoos attempts to harmonize sections 218.5, 1194, and 226.7 as follows: section 226.7 meal and rest pay is a wage that does not fall within section 1194’s one-way fee provision and therefore defaults into section 218.5’s two-wayfee provision. This reasoning cannot stand. Mealandrest premium payis like overtime pay: both are wages, but both are statutorily- required wages. Unlike contractual wages, statutory wages are regulatory devices, and applying two-way fee shifting to meal and rest pay would thwart the Legislature’s enforcement mechanism. Thus, section 218.5 cannot apply to section 226.7 pay. The statutory language, the regulatory context, and case law all support this construction. Contrary to Immoos’ misreading, the legislative history in 1999- 2000 does not show that the Legislature “abandoned” one-way fee shifting for section 226.7 claims. Indeed, it supports section 1194’s application to section 226.7 claims. And evenif the legislative history were ambiguous, any ambiguity in the Labor Code should be resolved in favor of workers. (Murphy v. Kenneth Cole (2007) 40 Cal.4th 1094, 1103 (“Murphy”) (citations omitted).) Thus, consistent with the decisions in Earley v. Superior Court (2000) 79 Cal.App.4th 1420 (“Earley”), which the Legislature codified, and McGann v. United Postal Service, Inc. (2011) 192 Cal.App.4th 1425 (“McGann”), which applied Earley, and in accordance with the powerful and long-standing public policy of protecting workers and law-abiding employers, this Court should hold section 218.5’s reciprocal fee provision inapplicable to section 226.7 claims. A. Section 218.5 Does Not Apply To Statutorily-Required Meal And Rest Premium Pay 1. The Statutory Language, Regulatory Context, And Case Law Show ThatSection 218.5 Applies To Contractual Wages Only Immoosarguesthat the “pay” owed under section 226.7 is a wage, and therefore is covered by the phrase “non-payment of wages”in section 218.5. (IAB,3, 22-26; see 218.5.) The words “wages”or “wage” appear in both sections 218.5 and 1194, so the status of section 226.7 pay as a wage cannot dispose of the fee shifting question. (See §§ 1194, 218.5; IAB, 22- 26.) The Labor Code defines “wages” broadly. (§ 200; see Murphy, supra, 40 Cal.4th at 1104, fn. 6.) Like most other payments for employees’ time, unpaid balances of section 1194’s “legal overtime compensation” and “legal minimum wage” qualify as “wages” under section 200. (See Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 178; Cuadra v. Millan (1998) 17 Cal.4th 855, 862.) Indeed, the CACTI Jury Instructions on section 1194, which Immooscites extensively, references section 200’s definition. (IAB, 12-13, 17-18; (Respondent’s Motion for Judicial Notice (““RMJN”), [Exs. O, 36, U, 39].) The fee shifting question instead turns on whether a wage is statutory or contractual, a distinction explained in Earley. (Earley, supra, 79 Cal.App.4th at 1430-1431; see also Appellants’ Opening Brief on the Merits (“OB”), 1-2, 21-32.) Earley construed section 218.5’s two-way fee provision restrictively, limiting the section’s application to contractual wages only. (/d. at 1430.) Earley based its construction on the chilling effect on enforcementinherent in section 218.5’s application. (/d. at 1431.) In 2000, the Legislature amended section 218.5 to restrict the section’s application with express instructions to interpret the amendment in accordance with Earley. (See, infra, 9-12; see OB, 21-28.) As argued in the Opening Brief, Earley and its codification should govern here. Meal andrest pay is statutorily-required premium pay. (See, Murphy, 40 Cal.4th at 1114, 1120; OB, 12-13, 15, 18-19, 28-31.) As a regulatory device, it is identical to overtime, because it incentivizes employers to act in accordance with the state’s regulatory goals and compensates workers whose employers have strayed from those goals. (d. at 1109, 1113-1114; see OB, 28-29.) Only employees represented by a union may arguably alter the meal and rest requirements through a collective bargaining agreement. (See, e.g., section 514; Lazarin v. Total Western (2010) 188 Cal.App.4th 1560.) Thus, consistent with Earley and its subsequent codification, meal and rest pay is statutory and cannot be construed to be among the contractual wages contemplated under section 218.5. Understandably, Immoosskirts Earley, ignoring it until page 38 of its Answer and attempting to frame Earley’s construction of section 218.5 as dicta. (IAB, 37-41.) But Immoos recognizes, as it must, that when courts construe potentially overlapping statutory provisions, “all related statutory provisions must be read together and harmonized.” (IAB, 4.) Indeed, courts harmonizing multiple provisions necessarily construe all provisions at issue. (See Turner v. Association of American Medical Colleges (2011) 193 Cal.App.4th 1047, 1056 (“Turner”) (statutes must be “regarded as blending into each other and forming single statute”).) Earley was no different. Its construction of section 218.5 and its analysis of the distinction between statutory and contractual wagesare at the heart of Earley’s explanation of how the provisions coexist. (See Davis v. Ford Motor Credit Co. (2009) 179 Cal.App.4th 581, 601.) Even the Court of Appeal below considered that distinction and the section 218.5 construction as part of Earley’s harmonization of the two provisions. (Kirby, et. al. v. Immoos (filed June 25, 2009, Court of Appeal No. C062306) [nonpub. Opn.] (the “Opinion”), 14-15.) Thus, Earley’s construction of section 218.5 is not dicta. Significantly, the Court of Appeal in McGann recently applied Earley to hold that “a claim for remedial compensation under Labor Code section 226.7 does not trigger the reciprocal fee recovery provisions of {section 218.5].” (McGann, supra, 192 Cal.App.4th at 1440.) Kirby fully agrees with McGann’s reliance on the Earley distinction: the forms of compensation “an employer voluntarily offers its employees, or agrees to provide pursuant to a collective bargaining agreement, are fundamentally different than a state-imposed mandate to pay overtime, a minimum wage or compensationfor a missed mealor rest break.” (Id. (emphasis added).)° Indeed, there are only three kinds of statutory wages in California: “the legal minimum wage,” “the legal overtime compensation,” and meal and rest pay. (McGann, supra, 192 Cal.App.4th at 1440; see §§ 1194, 226.7.) All three wages are among the “core remedial employee * Kirby, however, disagrees with McGann’s analysis of wages. Contrary to McGann,section 200 does not encompass contractual wagesonly. (192 Cal.App.4th at 1139-1440; see, supra, 3.) McGann misconstrues Prachasaisoradej v. Ralphs Grocery Company, Inc. (2007) 42 Cal.4th 217, 229 (“Prachasaisoradej”). Prachasaisoradej does not hold that section 200 wagesincludes contractual wages only. (Prachasaisoradej, supra, 42 Cal.4th at 229.) Thus, McGann’s analysis ofhow section 226.7 pay is morelike a penalty andless like a wage for fee shifting purposesis not essential. (McGann, supra, 192 Cal.App.4th at 1139-1440.) Kirby also disagrees with McGann’s analysis of the term “action” in the second paragraph ofsection 218.5. (See id. at 1935; see,infra, 24-29.) protections.” (McGann, supra, 192 Cal.App.4th at 1439.) The Labor Code has long recognized the distinction between statutory and contractual wages as has the Court. (See § 223; Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659, 671-672 (“Sonic”) (citations omitted); Gentry v. Superior Court (2007) 42 Cal.4th 443, 456 (“Gentry”); Lusardi Construction Co.v. Aubry (1992) 1 Cal.4th 976, 986-988; Schachter v. Citigroup, Inc. (2009) 47 Cal.4th 610, 620 (“Schachter”). * An employee’s right to statutory wages and contractual wages “clearly have different sources.” (Earley, supra, 79 Cal.App.4th at 1430.) Contractual wages are “a matter of private contract between the employer and employee.” (Id.) Statutory wages, on the other hand, are imposed by the state to further important public policy purposes, and thus, cannot be subjected to the risks inherent in section 218.5. (See id. at 1430; McGann, supra, 192 Cal.App.4th at 1439-1440.) In response, Immoos argues that meal and rest pay is calculated using the employee’s “regular contracted wage rate,” thereby renderingit within section 218.5’s purview. (IAB, 22-23; see also OB, 31-32.) But overtime pay and the meal and rest pay are calculated using the same method: multiply the worker’s “regular rate” of pay (which itself may be 3 Notably, the Labor Code contains at least one contingent statutory wage, where the right to the wage is contingent on an agreementto provide the wage in the first instance. (§ 227.3.) The Labor Code does not mandate vacation wages. But once an employer agrees to provide vacation wages, section 227.3 bars the employer from withholding payment of unlawfully forfeited accrued vacation wages. (/d.) Moreover, all wages are subject to statutory restrictions in amount, time, and manner of the payment. (See Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554, 572; Schachter, supra, 47 Cal.4th at 620.) either a statutory minimum hourly rate or a contractual rate, it does not matter which) by a statutorily-prescribed number. (§§ 226.7, 510.) The multiplier for computing time-and-a-half overtime pay, for example,is 1.5; and that product then is multiplied by the number of hours to which that rate applies. For meal and rest pay, the multiplier is 1.0; and that product then is multiplied by the number of compensable violations. For both, while a contractual rate figure may be a part of the calculation, the amount to be paid is mandated by law andis not contractual. (See Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 976 (dis. opn. of Kennard,J.).) The equivalence of overtime pay and meal and rest pay does not end with method of computation. The regulatory goals of these statutory wages overlap as well. While overtime pay has a primary regulatory goal of encouraging job creation and spreading work throughout the workforce, reducing the numberof long shifts undoubtedly has safety benefits as well. (See Gentry, supra, 42 Cal.4th at 456 (citation omitted).) And while meal and rest pay has a primary regulatory goal of enhancing safety and reducing accidents, it also gives employers added incentive to hire enough workers to avoid incurring those premium obligations.‘ (See Murphy, supra, 40 Cal.4th at 1113 (citation omitted).) Finally, meal and rest and overtime premium are the same conceptually in that both mandate additional compensation when employees work more than a defined amount. With overtime, that amountis defined in terms of the number of hours worked in a workday or a workweek. With meal and rest pay,it is defined in terms of * Immoos’ argumentthat “[a]n employerfailing to provide sufficient meal or rest periods is not saved from having to hire additional workers”is simply incorrect. (IAB, 36.) For example, 2,300 employees working eight- hour shifts without two ten-minute rest breaks will work as many hours as 2,400 employees whoreceive those breaks. the number of hours worked without breaks as prescribed by section 512 and the [WC wageorders. Immoos next contends that the McGann decision harms workers by precluding prevailing workers from recovering section 218.5 attorney’s fees. (IAB, 26-28.) Kirby is not fooled by Immoos’ sudden purported advocacy for workers. Even if McGann did prevent prevailing workers from recovering section 218.5 fees, it would still protect workers rather than harm them.° If it comes to a choice between a two-way fee provision and the American Rule, the latter obviously is the safer and better rule for workers. (See OB, 12.) The alternative that Immoos advocates would impose on workers a risk they cannot afford to bear. The chilling effect that such a risk allocation would impose on workers seeking to enforce state minimum labor standards is undeniable. (See OB, 42-43.) Immoosalso asserts that courts may not look beyond the text and legislative history, and use analogous reasoning to exclude meal and rest pay from section 218.5. (IAB, 41-42.) Butthe statutory text expresses the distinction between statutory and contractual wages. Under the doctrine of noscitura a sociis (“a word is known by the companyit keeps”), the words in section 1194 describe statutory wages, whereas the words in section 218.5 describe contractually agreed-upon rights. (See §§ 1194, 218.5; Gustafson v. Alloyd Co. (1995) 513 U.S. 561, 575 (“Gustafson’).) Moreover, far from “taking on the role of the Legislature,” the Court will > Whether McGannbarred prevailing employees from recovering feesis an open question. The opinion doesnot explicitly state that section 218.5 does not apply to section 226.7 claims. Instead, McGannstates only that the “reciprocal fee recovery provisions” do not apply. (McGann, supra, 192 Cal.App.4th at 1139-1440.) be harmonizing statutes as is it required to do. This is a core function ofthe judiciary. (See Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1202.) 2. Section 218.5’s Legislative History Demonstrates That The Legislature Did Not Intend Two-WayFee Shifting To Apply To Section 226.7 Claims When the Legislature amended section 218.5 in 2000, it stated: “{T]hese amendments are intended to reflect the holding of the Court of Appealin [Earley].” (Stats. 2000, ch. 876 [Assembly Bill No. 2509 (“AB 2509”)], § 11.) The Legislature could not have been more explicit aboutits intent. Once again, Immoos sidesteps Earley and its codification, and instead points to unrelated one-way fee language deleted from earlier versions of section 226.7, contending that those deletions are “most persuasive” of the Legislature’s intent to subject section 226.7 claims to section 218.5. (IAB, 5-8, 28-29.) But Immoosfails to mention that this language was part of the original civil penalty scheme contemplated for section 226.7 (“penalty”), which the Legislature rejected, instead enacting the current self-executing and statutorily-required pay obligation (“pay”). The deletions simply show that once the section 226.7 remedy fundamentally changed from penalty to pay, an explicit one-way fee provision became unnecessary. (See, infra, 12-16.) a. Immoos Misreads The Legislative History Of 1999-2000 Courts have a “duty to construe statutes, not isolated provisions.” (Gustafson, supra, 513 U.S. at 568.) The omission of specific statutory language shouldbe interpreted in context. (See Pattern Makers’ League of North America, AFL-CIO v. National Labor Relations Board (1985) 473 U.S. 95, 111, 111, fn. 23.) Immoos wrongly interprets the relevant history surrounding these deletions, and in arguing that these deletions are 9 somehow indicia of the Legislature’s intent to subject section 226.7 claims to two-way fee shifting, fails to discuss accurately or even mention the following: e The original version of section 226.7 introduced on February 19, 1999 as part of Assembly Bill No. 633 (“AB 633”) contained a penalty schemeprovidingboth an explicit civil penalty and a separate payment for aggrieved workers. Proposed section 226.7(c) of this penalty scheme required workers to file enforcement actions, and subsection (c)(2) contained the one-way fee language at issue. (See Murphy, 40 Cal.4th at 1106-1108; AB 633 (1999-2000 Reg. Sess.) Feb. 19, 1999) [Appellants’ Supplemental Motion for Judicial Notice (““ASMJN”), Ex. Q], section 226.7(c)(2) § 9.) Known as California’s landmark anti- sweatshop bill, AB 633 sought to enforce wage and hour laws in the “large and growing ‘underground economy.’” (See Assem. Com., on AB 633 (1999-2000 Reg. Sess.) (Mar. 25, 1999) [ASMIN,Ex. R], 6-8.) The garment-related portions of AB 633 were eventually enacted, while all non-garment-related provisions, including section 226.7(c)(2), were moved into Assembly Bill No. 1652 (“AB 1652”), which Governor Davis vetoed. (See Stats. of 1999, AB 633 [ASMIN, Ex. S]; AB 1652 (1999-2000 Reg. Sess.) Sept. 8, 1999 [ASMIN, Ex. T], § 4; AB 1652, Assem.Final Hist. (1999-2000 Reg. Sess.) [ASMJN,Ex. U].) e Five months later, on February 24, 2000, the same version of the section 226.7 penalty scheme was introduced in AB 2509.° (AB 2509 ® The February 24, 2000 version of section 226.7(c)(2) provided: “Seek recovery of payments under paragraph (2) of subdivision (b) in a civil action.” ([ASMIN, Ex. V], § 12) This differed from the original 226.7(c)(2) which provided: “Bring a civil action.” (AB 633 (1999-2000 Reg. Sess.) Feb. 19, 1999 [ASMIN,Ex. Q], § 9.) 10 (1999-2000 Reg. Sess.) Feb. 24, 2000 [ASMIN, Ex. V], § 12.) AB 2509 sought to “strengthen enforcement of existing wage and hour standards.” (See Assem. Com. on AB 2509 (1999-2000 Reg. Sess.) Feb. 24, 2000, [ASMJN, Ex. W], 5-7.) Significantly, the February 24, 2000 version ofAB 2509 also included the proposed amendmentto section 218.5. (See [ASMIN, Ex. V], § 8.) On June 30, 2000, the IWC adopted a meal and rest pay remedy modeled after overtime. (See Murphy, 40 Cal.4th at 1105-1106, 1109- 1111; [WC Hearing Transcript (May 5, 2000) [ASMIN, Ex. AA], 75:10-24, 76:1-15.) On August 25, 2000, the critical modifications to section 226.7 in AB 2509 occurred. The Senate deleted the section 226.7 penalty scheme in its entirety — including the 226.7(c)’s enforcement action requirement and 226.7(c)(2)’s one-way fee language — replacing it with a self- executing pay remedy identical to the [WC pay remedy enacted two months prior. (See Murphy, 40 Cal.4th at 1106-1108; AB 2509 (1999- 2000 Reg. Sess.) Aug. 25, 2000 ([ASMJN, Ex. BB], § 7.) On that same day, August 25, 2000, the Senate simultaneously codified Earley. (See [ASMIN, Ex. BB], § 11.) This codification occurred five monthsafter the decision in Earley on April 20, 2000. The Legislature then moved the original section 226.7 penalty scheme to Assembly Bill No. 2857 (“AB 2857”). (See AB 2857 (1999-2000 Reg. Sess.) Aug. 25, 2000 [ASMJN, Ex. CC], § 3.) The AB 2857 version of section 226.7 contained section 226.7(c)(2)’s one-way fee language. On August 29, 2000, the Assembly concurred in the Senate amendments to AB 2509. (See Conc. in Sen. Amend. to AB 2509 (1999-2000 Reg. Sess) Aug. 25, 2000 [ASMJN, Ex. DD].) 1] e One day later, on August 30, 2000, the Senate deleted the original penalty scheme, including 226.7(c)(2), from AB 2857. (See AB 2857 (1999-2000 Reg. Sess.) Aug. 30, 2000 [ASMIN, Ex. EE], § 2, 3.) On August 31, 2000, AB 2857 was placed in the “inactive”file. (AB 2857, Assem. Final Hist. (1999-2000 Reg. Sess.) [ASMIN, Ex. FF], § 3, 2.) e On September 28, 2000, the governor approved AB 2509. (AB 2509, Assem.Final Hist. (1999-2000 Reg. Sess.) [ASMJN, Ex. GG].) The Answer fails to convey these events accurately or even chronologically, describing only certain selected events over several non- consecutive pages. (See IAB,6-8, 11, 38.) Viewed in context and proper sequence,the legislative history does not show that the Legislature intended for section 218.5 to apply to section 226.7 claims. b. The Legislature Did Not Abandon One-Way Fee Shifting, Nor Did It Intend For Two-Way Fee Shifting To Apply When It Deleted Section 226.7(c) And Fundamentally Altered The Meal and Rest Remedy From A Penalty To Pay The history demonstrates that when the Legislature fundamentally altered the remedy in section 226.7 from a penalty to pay and simultaneously codified Earley, the Legislature did not “abandon” one-way fee shifting as Immoos urges. (IAB, 5-8.) To the contrary, because the penalty scheme had been superseded by a self-executing pay remedy, the Legislature found it unnecessary to provide explicitly for fees. Instead, the Legislature had every reason to assume one-wayfee shifting would apply to its newly-created pay. Notably, the Legislature did not codify Earley until after it removed the penalty, indicating that the Legislature was not compelled to explicitly embrace Earley’s harmonization of sections 218.5 and 1194 until it created a new statutory wage in the Labor Code: meal and rest pay. (See County ofSan Diego v. Alcoholic Beverage Control Appeals 12 Board (2010) 184 Cal.App.4th 396, 405 (finding significance in actions the Legislature undertakes concurrently); see, supra, 5-6.) Murphy supports this interpretation by confirmingthe self-executing aspect of the newly-created pay: The Senate amendments eliminated the requirement that an employeefile an enforcementaction, instead creating an affirmative obligation on the employer to pay the employee one hour ofpay. | Underthe amendedversion of section 226.7, an employeeis entitled to the additional hour of pay immediately upon being forced to miss a rest or meal period. In that way, a payment owed pursuant to section 226.7 is akin to an employee’s immediate entitlement to payment of wages or for overtime. (citation omitted) By contrast, Labor Code provisions imposing penalties state that employers are “subject to” penalties and the employee or Labor Commissioner mustfirst take someaction to enforce them. (citation omitted) (Murphy, 40 Cal.4th at 1108.) The Legislature’s decision to make meal and rest pay automatic instead of subjecting the requirement to fragmentary worker-initiated enforcement suggests that it believed the requirement to be particularly important. The Legislature simply could not have intended to subject its newly-created self-enforcing right to pay for missed meal and rest periods akin to overtime subject to attorney’s fee liability for employees. The Legislature’s decision to move the penalty scheme into AB 2857 while it debated the pay remedy in AB 2509 provides further support. The Senate rules committee’s simultaneous discussion on both versions of section 226.7 demonstrates the fundamental distinction between the two remedy schemes. (See Sen. Rule Com., AB 2857 (1999-2000 Reg. Sess.) Aug. 25, 2000 [ASMIN, Ex. HH], 4 (“The optionoffiling a right of private action is deleted.”); Sen. Rule Com., AB 2509 (1999-2000 Reg. Sess.) Aug. 25, 2000 [ASMIN,Ex. II], 2-3 (“Rest and meal periods: right of private action”).) Significantly, this committee did not expressly list one-way fee 13 shifting among the Senate’s deletions from AB 2509, nor did the Legislature list one-way fee shifting as deleted in the concurrence in 2000 as it did in the concurrence of 1999 for AB 1652. (See Conc. in Sen. Amend. to AB 2509 (1999-2000 Reg. Sess.) Aug. 25, 2000 [ASMIN,Ex. DD], 1-2; Conc. in Sen. Amend. to AB 1652 (1999-2000 Reg. Sess.) Sept. 9, 1999 [ASMIN,Ex. JJ], 2.) This suggests that the Legislature in 2000 was careful to preserve one-way fee shifting generally, even as it rejected the section 226.7 penalty scheme and saw as unnecessary the one-way fee language in section 226.7(c)(2). c. Immoos Fails To Show How TheLegislative History Of 1999- 2000 Supports The Application Of Section 218.5 To Section 226.7 Claims Immoos first contends that the Legislature did not consider the proposed “private right of action and unilateral attorney’s fee provision” subject to section 1194. (IAB, 8.) For support, Immooscites an enrolled bill report, dated September 13, 2000. (IAB, 8.) This report, however, does not comment on law existing at the time of “the private right of action and unilateral attorney’s fee provision.” ({IMJN, Ex. H].) The Legislature wrote the enrolled bill report after it abandoned “the private right of action and unilateral attorney’s fee provision” in favor of a pay remedy. The report simply compares the pay remedy to the absence of a pay remedy. (IAB, 9.) Immoosalso cites a Senate judiciary committee report, dated August 8, 2000. (See id. at 8.) There is no description of existing law on the pages cited by Immoos or elsewhere in this report. (See [IMJN, Ex. 1.’ ’ Rather than supporting Immoos, these reports buttress Kirby’s interpretation. The enrolled bill report does vot list AB 633 or AB 1652 as part ofthe legislative history of section 226.7. (See [IMJN , Ex. H]., 10- 12.) This implies that the Legislature considered the ultimately enacted remedydistinct from those proposed in 1999. 14 Immoos next contends that the Legislature knew how to provide explicitly for one-way fees in AB 2509, but did not provide them for section 226.7. (IAB, 8.) The only fees stated in AB 2509, however, were either for civil penalty schemes, such as section 226, or to provide for two- way fee provisions, such as in section 98.2.2 The Legislature did not explicitly state any one-way fee provisions in AB 2509. Finally, Immoospoints to the Legislature’s “definitive statementthat it did not consider section 226.7 . . . as providing for actions” under section 1194. (IAB, 7.) This “definitive statement,” however, is dated April 12, 2000, five months prior to the August 25, 2000 Senate amendment transforming the penalty into pay. (See, supra, 11.) Thus, because it related to the proposed section 226.7 penalty, this document does not reflect any statement about the ultimately selected pay remedy and that remedy’s interaction with “the legal minimum wageor the legal overtime compensation”undersection 226.7. In sum, Kirby’s interpretation is the more reasonable. In enacting section 226.7, legislators were emphatic about protecting workers in the “underground economy” who worked “long hours without rest breaks.” (See, supra, [ASMJN, Ex. W], 6-7; see also Murphy, 40 Cal.4th at 1112- 1114.) The Legislature would not create a new self-enforcing pay remedy for workers whose employers violated meal and rest period requirements, but then turn around and let those same employers recover their attorney’s fees from those same workers who brought unsuccessful claims in good faith. The unreasonableness of Immoos’ construction becomes even more acute when one considers that, in precisely the same bill, the Legislature ® The language in section 98.2 provided for two-wayfee shifting until the Legislature amended section 98.2 to makeit a one-way provision in 2003. (See Sonic, supra, 51 Cal. 4th at 674, fn. 2.) 15 stated it was codifying Earley, a case which explains how and why allowing employers to seek fees from workers under section 218.5 would severely diminish the enforcement of minimum labor standards. Further, if ambiguity exists in the Labor Code, it should be resolved in favor of workers. (See Murphy, supra, 40 Cal.4th at 1103 (citations omitted); California Grape & Tree Fruit League v. Industrial Welfare Com. (1969) 268 Cal.App.2d 692, 698 (“Remedial statutes . . .are not construed within narrow limits of the letter of the law, but rather are to be given liberal effect to promote the general object sought to be accomplished.”).) Thus, Immoos’interpretation ofthis legislative history fails. 3. Immoos’ Proposed “Three-Fold Purpose” Of Section 218.5 Should Be Rejected Immoos’ interpretation of section 218.5’s purpose also fails. Immoos argues that section 218.5’s purported “three-fold purpose”is to: (1) encourage workers to file claims; (2) discourage workers from filing “unmeritorious” claims; and (3) encourage workers to file such claims with the Labor Commissioner. (IAB, 9-11 (relying on [IMJN, Exs. J-N], 28-30, 38.) Once again, Immoosdistorts the legislative history. Contrary to Immoos’ characterization, the purpose of section 218.5 is not evenly divided among three parts. The overall thrust of section 218.5 is to encourage workers to enforce their rights under the Labor Code. (See [IMJN, Ex. N], 2 (“SB 2570 is sponsored by the Teamsters Union andis intended to coverthe cost of obtaining wages and benefits from recalcitrant or slow paying employers.”); Assem. Com., SB 2570, as amend. Jun. 17, 1986 [ASMIN Ex. KK], 1-2.) Furthermore, even Immoos admits that the Legislature explicitly included the word “frivolous” in describing the purported second purpose. (See [IMJN , Ex. K], 3 (“[E]mployers will be protected from frivolous lawsuits.”), Ex. M, 2 (same), Ex. L, 1 (“[T]his bill protects employers from 16 frivolous lawsuits.”).) Additionally, there is no stated public policy in the Labor Code ofprotecting employers from employee suits. Thus, the most reasonable construction of section 218.5 is that section 218.5’s two-way fee provision should apply only when contractual wagesare solely at issue, and only when employers defeat frivolous claims. It should not apply when employers defeat non-frivolous claims where the litigation efforts of employees simply come up short. This interpretation of section 218.5 would align the statute with state and federal civil rights and employment rights statutes, which allow for two-way fee shifting in favor of the employer “only in exceptional circumstances” in which the plaintiffs claims are “frivolous, unreasonable, or groundless.” (Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1388; Harris v. Maricopa County Superior Court (9th Cir. 2011) 631 F.3d 963, 968.) Finally, for the third purported purpose, Immoos relies on an enrolled bill report describing a “side effect” of section 218.5: the case load at the Labor Commissioner’s office could increase. (IAB, 10-11 (relying on [IMJN, Ex. N].) Immoosthen simply asserts that this “side effect” is a bonafide legislative purpose. (IAB, 10-11, 45-46.) Immooscites no other legislative history or authority for this assertion.” Encouraging workers to file claims with the Labor Commissioner instead of in court is not a purposeof section 218.5. To the contrary, private civil suits are essential to the overall worker protection enforcement schemein California. (See, e.g., Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, ” Indeed, the Legislature knows howto direct claims to the exclusive jurisdiction of the Labor Commissioner. (See [ASMJN,Ex. S], 3128 (stating that the new garment workerprotections in AB 633 would be enforced by workers “solely by filing a claim with the Labor Commissioner”).) The Legislature did not apply this procedure to section 226.7 claims. 17 224); Franco v. Athens Disposal Co., Inc. (2009) 171 Cal.App.4th 1277, 1302.) Moreover, Immoosdoes notcite to any post-1986 legislative history confirming that its purported “three-fold purpose”of section 218.5 survived in light of Earley. Instead, Immoos attempts to reconcile with Earley by arguing that the existence of section 227.3 vacation pay at the time of section 218.5’s enactment in 1986 demonstrates that the “three-fold purpose” “transcends” both contractual and statutory wages. (IAB, 27.) But as set forth above, section 227.3 is a contingent statutory wage, not amongCalifornia’s statutory wages. (See, supra, 5-6.) Finally, section 226.7 did not exist when section 218.5 was enacted in 1986, and section 1194 was not amended to include its one-way fee provision until 1991. Indeed, in 1986, there simply was no such thing as mealandrest pay, as the first version of section 226.7 was eight years away from being introduced. Therefore, at those times (1991 and 1986), the Legislature did not express — and could not have expressed — any specific intent or purpose regarding fee-shifting in causes of action alleging violations of section 226.7. Hence, this Court should reject Immoos’ proposed “three-fold purpose.” B. Because Section 218.5 Does Not Apply To Section 226.7 Claims, Section 1194 Applies There is support for including section 226.7 within section 1194’s coverage. Immoos concedes that the Labor Code doesnotdefine the terms and phrase in section 1194. (IAB, 11.) Immoosinsists, however, that those words should beread as referring exclusively to the “minimum wagerate” set by the IWC (“IWCrate”) and the overtime compensation rate set by section 510 (“section 510 rate”). (IAB, 3, 11, 16, 22, 32.) Kirby agrees 18 that section 1194 includes these rates. (OB, 15-21.) Nonetheless, the statutory language should notbe read as being confined to thoserates. In response, Immoos urges the Court to compare the language in section 1194 to section 1194.5. (IAB, 19-20.) A more accurate comparison, however, is between sections 1194 and 1194.2. Both sections 1194 and 1194.2 are wage statutes, unlike section 1194.5, which provides for injunctive relief. The liquidated damages provision of section 1194.2(a) reads as follows: In any action under Section 1193.6 or Section 1194 to recover wages because of the payment of a wage less than the minimum wagefixed by an order of the commission, an employee shall be entitled to recover liquidated damages .... (§ 1194.2.) Section 1194.2(a) limits its application to “a wage less than the minimum wage fixed by an order of the commission.” (Id. (emphasis added).) This is precisely the definition that Immoos seeks for “the legal minimum wage”in section 1194. The Legislature added section 1194.2(a) in 1991, when it added one-way fee language to section 1194. (See, SB 955 (1991-1992 Reg. Sess.), [ASMJN, Ex. MM], §§ 2-3.) If the Legislature intended to limit section 1194’s scope to the narrow meaning argued by Immoos,it could and would have doneso in the same mannerit did in section 1194.2. Therefore, if the Court construes “the legal minimum wage”in section 1194 as an exclusive reference to the IWCrate, the construction would render section 1194.2’s reference to “a wage less than the minimum wage fixed by an order of the commission” mere surplusage. (See Moyer v. Workmen’s Comp. Appeals Board (1973) 10 Cal.3d 222, 230 (“{A] construction making some words surplusage is to be avoided.”).) Thus, the meaning of “the legal minimum wage”in section 1194 clearly is not limited to the [WCrate. 19 As discussed in the Opening Brief, “the legal minimum wageor the legal overtime compensation” is unambiguously and deliberately broad. (OB, 14-15.) For example, “[i]t is well established that California’s prevailing wage law is a minimum wage law.” (Road Sprinkler Fitters v. G & G Fire Sprinklers, Inc., 102 Cal.App.4th 765, 776 (“Road Sprinkler Fitters’) (citing Metropolitan Water Dist. v. Whitsett (1932) 215 Cal.400, 417-418); O.G. Sansone Co. v. Department of Transportation (1976) 55 Cal.App.3d 434, 448, People v. Hwang (1994) 25 Cal.App.4th 1168, 1181).) Immoos, however, urges this Court to disregard Road Sprinkler Fitters because the Court of Appeal there did not construe section 1194. (IAB, 31-32.) While Road Sprinkler Fitters does not harmonize sections 218.5 and 1194, it demonstrates that “construed in context,” and “with reference to the whole system of law of whichit is a part,” the meaning of section 1194’s “the legal minimum wage”is broader than just the IWCrate. (See Mejia v. Reed (2003) 31 Cal.4th 657, 663 (“Mejia”) (citations omitted); OB, 14.) Indeed, there are many forms of “the legal minimum wage.” Local jurisdictions in California may establish “living wages” that are higher than the [WC’srate. (See One Corp. v. City ofBerkeley (9th Cir. 2004) 371 F.3d 1137, 1142; see also Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1177.)"° '0 Immoos’ erroneous reliance on a CACI Jury Instruction actually supports Kirby’s interpretation. The instruction provides: “The court must determine the prevailing minimum wage rate from applicable state or federal law. (See, e.g., Cal. Code Regs., tit. 8, § 11000.)” (IMJN, Ex. O, 35 (double emphasis added).) This is exactly Kirby’s point. The state minimum wagerate is just an “e.g.” — one example of the “legal minimum wage.” Immoosalso points to the [WC wage orders and an IWC Notice. (IAB, 12-13.) Like the Labor Code, those documents do not define the “Jegal minimum wage.” Section 1194 is not cited once. Nothing in wage order 16 or the Notice limits “the legal minimum wage”in section 1194 to the IWC rate. 20 “The legal overtime compensation” is similarly broad. In explaining how the meal andrest pay is a form of “overtime,” Kirby does not endorse an unpermitted “double dip.” (IAB, 34-37; see OB, 18-21.) Kirby simply relied on Murphy to explain how work performed outside of the “section 226.7 prescribed period” can be construed as a form of - overtime. (OB, 13-21; see Murphy, 40 Cal.4th at 1104 (“If denied twopaid rest periods in an eight-hour workday, an employeeessentially performs 20 minutes of ‘free’ work”) (emphasis added).) Indeed, in insisting that “the legal overtime compensation” exclusively references the section 510 rate (IAB, 16, 34-3 7),'' and arguing that no authority exists for interpreting that phrase to include meal and rest pay, Immoos completely ignores Murphy. (IAB,37; see, supra, 4, 7-8.) Immoos next provides a misleading discussion of legislative history." (See IAB, 13-15.) Contrary to the Answer, the “single-subject rule” did not restrict the 1913 Act to enforcing the “minimum wage “‘of this act.’” (See IAB, 13-15.) The “single-subject rule” prevents misleading or inaccurate titles so that legislators and the public are afforded reasonable notice of the contents of a statute.” (Marathon Entertainment, Inc. v. Blasi (2008) 42 Cal.4th 974, 988-989; see Cal. Const., Art. 1V § 9.) Immoos ‘1 Immoos also relies on the Fair Labor Standards Act (“FLSA”) and another CACI Jury Instruction. (IAB, 18-20.) Immoos’reliance on FLSA is baseless. FLSA’s pay requirements are limited to minimum wage and overtime pay for workweeks longer than 40 hours. (See, e.g., 29 U.S.C.§ 207(a).) It provides essentially nothing else in those categories. Thus, FLSA’s definitions and usages are irrelevant to California’s significantly more complex andprotective legislative scheme. !2 Tmmoosalsorelies on publications from 1913. (IAB, 15-16.) Such publications are unpersuasive except insofar as they demonstrate that advancesin workers’ rights, even if controversial in their time, are the direction of progress. 21 incorrectly identifies the subject of the 1913 Act as “minimum wage.” In reality, however, the subject is “the employment of women and minors.” (See [IMJN, Ex. Q], 632 (describing the 1913 Act as “[a]n act regulating the employment of women and minors”).) Hence, the 1913 Act would run afoul of the single-subject rule only if it sought, for example, to regulate employment of women and minors and the public education of minors. The 1913 Act is not limited to “enforc{ing] the minimum wage‘of this act.’” (IAB, 15.) Indeed, the 1913 Act is much broader.'? Immoos also misconstrues Kirby’s “interchangeability” argument. (OB, 32-35.) Kirby does not argue that the “minimum wage” and “overtime” wages are literally interchangeable. (See id. at 32 (explaining Kirby’s “broad and non-literal construction”).) Rather, Kirby argues that, viewed in a broader regulatory context, they both are statutory wages and are among California’s “minimum wage laws.” (/d.) Indeed, viewed broadly, overtime pay and meal and rest pay both can be thought of as minimum wages themselves, in that they are the lowest wages allowed by law when they apply. (/d. at 13-18.) However they are conceptualized and calculated, “the legal minimum wageor the legal overtime compensation” are California’s statutory wages, and none can or should be subject to the chilling effect of section 218.5. (See, supra, 5-7.) Instead, all belong under section 1194. 13 The 1913 Act created meansto enforce regulations regarding employment of womenand minors, andlater, as amended, the employment of all workers. (See Martinez v. Combs (2010) 49 Cal.4th 35, 52.) Section 3(a) provided the IWC with broad powers,and section 18(a) instructed courts to construe the 1913 Act with equal breadth. ([IMJN, Ex. Q], 633; 637.) 22 Cc. California Public Policy Bars Section 218.5’s Application To Meal and Rest Claims If, however, this Court finds that “neither the languageofthe statutes nor their legislative history [is] dispositive,” then the Court “turn[s] to an analysis of the relevant policy considerations as they bear on the question of legislative intent.” (Mejia, supra, 31 Cal.4th at 668.) The Legislature has a powerful and long-standing public policy of enforcing wage and hour laws. (See Kerr's Catering Service v. Department of Industrial Relations (1962) 57 Cal.2d 319, 327; § 90.5.) Law-abiding employers are victims of wage-related violations too, competing on an uneven playing field against the small percentage of employers that deliberately and repeatedly violate these important worker- protection and public-safety laws. (See § 90.5.) In an economyaslarge as California’s, even a small percentage of unscrupulous employers adds up to a large number of violators, a far larger number of employers being competed with unfairly, and a still greater number of employees being denied legally mandated breaks, and an entire public being exposed to unnecessary safety risks. (Jd. (“It is the policy of this state . . . to ensure employees are not required or permitted to work under substandard unlawful conditions . . . and to protect employers who comply with the law from those who attempt to gain a competitive advantage at the expense of their workers byfailing to comply with minimum laborstandards.”).) The Legislature’s deliberate decision to deny fees to prevailing employers advancesthis policy. (See OB, 10-13, 27 (one-way provisions dominate the Labor Code); see also Turner, supra, 193 Cal.App.4th at 1061-1062.) The denial of liability for employer attorney’s fees thus encourages aggrieved workers to “seek redress in situations where they 23 would otherwise not find it economical to sue,” (Earley, supra, 79 Cal.App.4th at 1430-31) and is based on a fundamental recognition that employers “can more readily afford a protracted” litigation than can their employees. (Jones v. Tracy School Dist. (1980) 27 Cal.3d 99, 111.) The Opinion directly contravened this policy in awarding fees to Immoos. The result here is particularly unjust as Kirby settled a separate Labor Code claim against co-defendants for $6,000, the full amount of which would revert to Immoos' attorneys if the Opinion is upheld. (See OB, 5.) The Opinionis an outlier and should be reversed. il. “ACTION” IN SECTION 218.5 MEANS A CIVIL ACTION, NOT A CAUSE OF ACTION If, however, the Court finds that section 218.5 applies to section 226.7 claims, then the Court’s analysis is affected by whether section 226.7 claims are accompanied by claims for “minimum wage and overtime.” This Court should adopt a plain language construction of the term “action” in section 218.5, which would preclude section 218.5’s application to the section 226.7 claims here because those claims would be joined in an “action for which attorney’s fees are recoverable under Section 1194.” (§ 218.5.) AsKirby explained in the Opening Brief, this interpretation is fully supported by the section’s plain language, case law,and legislative history. (OB, 35-42.) The Court of Appeal in Jmmoos acknowledged that this construction is “plausible.” (Op., 16-17.) Jmmoos, however, rejected this “plausible” construction which favors workers, and, instead, chose a construction that assumes workers seeking to vindicate their rights under section 1194 in conjunction with non-section 1194 claims bring their section 1194 claims to “insulate” their action from section 218.5 in order to “game” the system. (See id. at 10-18.) Again, the Opinion runs contrary to 24 the fundamental public policy of protecting workers and should be reversed. Ample safeguardsexist to preventlitigation abuses. Courts are well- equipped to manage and deter frivolous litigation. (See OB, 41, fn. 13.) Litigants who bring meritless matters to the courts risk substantial sanctions. (See In re Shieh (1993) 17 Cal.App.4th 1154, 1168.) Thus, employers are insulated against frivolous litigation in numerous ways. Employees with non-frivolous meal and rest period claims, however, are not insulated from the chilling effect that results from the application of section 218.5 to meal andrest claims. Thus, this Court should adopt a plain meaning construction of “action” in order to prevent employers from threatening their workers with financial ruin and thereby intimidating them out of pursuing the wagesthey are legally owed undersection 226.7. A. Kirby’s Interpretation of Section 218.5 Will Not Harm Workers As Immoos Claims Immoos once again purports to become a workers’ rights advocate, urging that Kirby’s interpretation of “action” in section 218.5 will harm workers by depriving prevailing workers of section 218-5 attorney’s fees. (IAB, 42-43; see, supra, 7-8.) Again,the American Rule is the better rule for workers. (See, supra, 8; OB, 42-43.) Moreover, the presence of any non-frivolous section 1194 claim guarantees that the employee bringingit is a non-exempt worker who should not be dissuaded from seeking section 226.7 pay by the employer’s ability to raise the threat of liability for an outsized legal bill. If anything, bringing such a claim, far from “gaming” the system, vindicates “minimum wage” and “overtime” rights that the Legislature has madeit clear that it wants enforced. If there is any potential for harmful “gaming” of the system, it takes the form of lawbreakers escapingtheir legitimate wage obligations. 25 B. Courts Can Manage Attorney’s Fees Issues Where Causes of Action Are Joined With Section 1194 Claims Immoos offers up a second specter that Kirby’s construction of “action” means that in any “lawsuit” for non-payment of wages, section 218.5 could control, unless the litigant also pled a section 1194 claim. (IAB, 42-44.) Immoos’ assertion fails. Determining that “action” means an entire lawsuit for purposes of section 218.5 will mean only that thetrial court will be able to award “reasonable attorney’s fees.” It would not obligate the court to award all fees incurred for all work on the case. Trial courts have broad discretion in the matter of attorney’s fees.'* (Contractors Labor Pool, Inc. v. Westway Contractors, Inc. (1997) 53 Cal.App.4th 152, 169; Serrano v. Priest (1977) 20 Cal.3d 25, 49.) C. The Legislature and This Court Have Determined that the Term “Action” Refers to a “Lawsuit” Immoosasserts that when the Legislature chose the term “action”for the second paragraph of section 218.5, it really meant “cause of action,” even thoughit did not take the simple step of including those two additional '* Courts have exercised this discretion to preclude two-way fee shifting when a two-way claim is “inextricably” intertwined with one-way claims. (See Lopez v. United Parcel Service, Inc. (N.D. Cal. Dec. 14, 2010, No. C 08-05396 SI) 2010 U.S. Dist. LEXIS 136352, 4 (“Lopez”) (refusing to apply section 218.5 to action to recover overtime pay and straight-time because “any claims for which plaintiff would recover at a straight-time rate, rather than an overtime rate, were inextricably linked with the issue of whether he wasentitled to overtime”); Kline v. United Parcel Service, Inc. (N.D. Cal. June 22, 2010, No. C09-00742 SI) 2010 U.S. Dist. LEXIS 69623, 5; see also Turner, supra, 193 Cal.App.4th at 1059-1060.) In light of Lopez and McGann,Kirby is willing to submit supplemental briefing on the effect of bringing meal and rest claims alongside “minimum wage and overtime” claims as well as on any other issues that would assist the Court in its analysis. 26 words. (IAB, 44-46.) But the authorities Immoos cites provide little support. Immoos’reliance on Frost v. Witter (1901) 132 Cal. 421 (“Frost”)is wholly misguided. In Frost, this Court held that if an amendment to a cause of action within a complaint alters only the remedy or “means” by which the alleged cause of action is brought about, then the amendment may be considered as not having altered the cause ofaction in the original complaint. (Frost, supra, 132 Cal. at 426-447.) The result was that the underlying statute of limitations on the cause of action was tolled upon the timely filing of the original complaint. (/d.) Aspart of the reasoning, this Court distinguished among an “action,” a “cause of action” and a “remedy.” The Court stated that the “action” is the right or power of being in court — “