KIRBY v. IMMOOS FIRE PROTECTION

Appellants' Request for Judicial Notice

Cal.August 27, 2010

i 2 oy c Alo$y RSfa. Case No. S es O D) IN THE SUPREME COURT OF THE STATE OF CALIFORNIA AnthonyKirbyetal., RECEIVED Plaintiffs, Appellant andPetitioners AUG 97 . 2010 VS. CLERK SUPREME COURT ImmoosFire Protection, Inc., Defendant and Respondents Petition for Review ofa Decision of the Court ofAppeal, Third Appellate District Case No. C062306 REQUEST FOR JUDICIAL NOTICE LAW OFFICES OF ELLYN MOSCOWITZ,P.C. ELLYN MOSCOWITZ (SBN 129287) JENNIFER LAI (SBN 228117) 1629 TELEGRAPH AVE, 4™ FLOOR OAKLAND, CA 94612 ‘TELEPHONE:(510) 899-6240 FACSIMILE: (510) 899-6245 ATTORNEYSFOR PLAINTIFFS, APPELLANTS AND PETITIONERS ANTHONY KIRBY AND RICK LEECH,JR. Case No. S IN THE SUPREME COURT OF THE STATE OF CALIFORNIA AnthonyKirbyet al., Plaintiffs, Appellant and Petitioners VS. ImmoosFire Protection, Inc., Defendant and Respondents Petition for Review of a Decisionofthe Court of Appeal, Third Appellate District Case No. C062306 REQUEST FOR JUDICIAL NOTICE LAW OFFICES OF ELLYN MOSCOWITZ,P.C. ELLYN MOSCOWITZ (SBN 129287) JENNIFER LAI (SBN 228117) 1629 TELEGRAPH AVE, 4™ FLOOR OAKLAND, CA 94612 TELEPHONE:(510) 899-6240 FACSIMILE: (510) 899-6245 ATTORNEYSFOR PLAINTIFFS, APPELLANTS AND PETITIONERS ANTHONY KIRBY AND RICK LEECH,JR. INTRODUCTION Pursuant to Rule 8.252 of the California Rules of Court and California Evidence Code sections 452 and 459, Petitioners Anthony Kirby and Rick Leech (‘Petitioners”) respectfully requestthat this Court take judicial notice of the following documents: Exhibit A: Exhibit B: California Court Empowers Employers to Collect Attorney’s Fees From Unsuccessful Claimantsfor Unpaid Wages or Missed Breaks, VENABLE LLP LAB. & EMP. ALERT, Aug. 2010, available at http://www.venable.com/files/Publication/b01a758e-8 1 1b- 4b13-81c¢3- 3695db9 1e8ea/Presentation/PublicationAttachment/d978b 1b5-6ec3-41f2-b0bd-4332bf8d05b4/L- E_Alert_California_8-10.pdf Wage & Hour Update: Court Awards Attorney Fees To Prevailing Employer In Wage Claim Lawsuit, BARKER OLMSTED & BARNIER, APLC LEGAL UPDATE,Aug. 2010, available at http://www.barkerolmsted.com/news/legal- updates/newsletter0185.php Exhibit C: Posting of Robin E. Weideman, Attorneys’ Fees Properly Exhibit D: Awardedto Prevailing Employer in Wage Case,to http://www.callaborlaw.com/archives/283216-print.html (Aug. 3, 2010 7:38 PM). Kathy Robertson, Employees Ordered to Pay Attorney’s Fees, SACTO. BuS. JOURNAL,Jul. 29, 2010, available at 1 http://sacramento.bizjournals.com/sacramento/stories/2010 /07/26/daily66.html — Exhibit E: Posting of Garrett V. Jensen, Employees May BeLiable for an Employer’s Attorneys’ Fees Incurred in Successfully Defending Meal, to http://www.wzllp.com/blog/?post=16 (Aug. 10, 2010 3:09). Exhibit F: Posting of Robert Nudleman, Prevailing Employer in Exhibit G: Exhibit H: Meal/Rest Break Suit Entitled to Attorneys’ Fees, to http://blog.griegolaw.com/2010/07/28/prevailing- employer-in-mealrest-break-suit-entitled-to-attorneys-fees/ (Jul. 28, 2010). Recovery ofAttorney’s Fees in Wage Claims: California Court ofAppeal Strengthens Prevailing Employers’ Claimsfor Attorney’s Fees In Actions For Unpaid Wages And Benefits,SEYFARTH SHAW LLP ONE MINUTE MEMo, Aug. 5, 2010, available at http://www.seyfarth.com/index.cfm/fuseaction/publication s.publications_detail/object_id/c5a4a669-ef20-4472-bce2- 4c269df46cal/RecoveryofAttorneysFeesinWageClaimsCal iforniaCourtofAppealStrengthensPrevailingEmployersClai msforAttorneysFeesinActionsforUnpaidWagesandBenefits .cfm Special Fee Shifting Provisions: Third District Romps Around The Labor Code’s Bases For Recovery Of Attorney’s Fees, http://www.calattorneysfees.com/2010/07/special-fee- shifting-provisions-third-district-romps-around-the-labor- codes-bases-for-recovery-of-attorneys-fees.html (Jul.27, 2010 10:24 PM). Exhibit I: Court of Appeal Affirms Section 218.5 Attorney Fee Award to Defendant, http://cawageandhourlaw.blogspot.com/2010/07/court-of- appeal-affirms-section- 2185.html?utm_source=feedburner&utm_medium=feed&u tm_campaign=Feed%3A+cawageandhourlaw+%28Califor nia+Wage+and+Hour+Law+for+Employees%29 (Aug. 10, 2010 9:52 AM). True and correct copies of Exhibits A-I are attached. (See Declaration of Ellyn Moscowitz). ARGUMENT I. THIS COURT SHOULD JUDICIALLY NOTICE EXHIBITS A-I, NEWS AND LEGAL INDUSTRY ARTICLES REPORTING ON EMPOWERING EMPLOYERS TO COLLECT ATTORNEY’S FEES FROM EMPLOYEES. Petitioners request that this Court take judicial notice of Exhibits A-I. These exhibits should be judicially noticed under California Evidence Code, §452 (h). Exhibits A, B, and G are newsletters issued by counsel for employers relevant to this case in that they demonstrate that the Court of Appeal’s decision is now in the employers’ arsenal to be used against workers who seek redress for violations of Section 226.7. Exhibits C, E, and F are blogs written by employers’ attorneys after the Court of Appeal’s decision, relevant to this case in that they show positive developments for employers, providing a precedent for an award of attorney’s fees in actions for meal periods. Exhibit D is an article in a business journal, regarding the same precedential developments in actions for mealperiods. Exhibits H and I are blogs written by practitioners in the attorney’s fees and wageand hourfields, regarding the impact of the Court of Appeal’s decision ontheir fields of expertise. Judicial notice of Exhibits A-I is appropriate and may be considered by this Court for persuasive value. (Seelig v. Infinity Broadcasting Corp., et al. 97 Cal. App.4th 798, 808, (2002) fn. 5 [‘‘[D]efendants ask this court to take judicial notice of newsarticles... [w]e grant the request, exercising our discretion to judicially notice matters that were subject to discretionary judicial notice”); Hurvitz v. Hoefflin, et al. 84 Cal. App .4th 1232, 1235 (2000) fn. 1 [Court can take judicial notice of the content of what has been reported in news articles]. These exhibits are paramount to understand the impactthat the Court of Appeal’s decision has had on the wage and hourarena, and the misinterpretation of California’s public policy concerning workers and minimum labor standards, such as rest periods and meal periods. CONCLUSION For the foregoing reasons, Petitioners respectfully request that the Court take judicial notice of Exhibits A-I. Dated: August 26, 2010. Respectfully submitted, LAW OFFICES OF ELLYN MOSCOWITZ,P.C. flee. Mire, Ellyn Moscowitz Jennifer Lai Attorneysfor Petititoners DECLARATION OF ELLYN MOSCOWITZ I, Ellyn Moscowitz, declare as follows: 1. [aman attorney licensed to practice before this Court. | am an attorney of record for Petitioners Anthony Kirby and Rick Leech,in the above-captioned action. I have personal knowledge of thefacts stated herein, andif called as a witness I would testify competently thereto. 2. I makethis declaration in support of the attached Request for Judicial Notice. 3. Attached as ExhibitA is a true and correct copy of California Court Empowers Employers to Collect Attorney's Fees From Unsuccessful Claimantsfor Unpaid Wages or Missed Breaks, VENABLE LLP LAB. & EMP. ALERT, Aug. 2010, available at http://www.venable.com/files/Publication/b01a758e-8 1 1b-4b13- 81c3-3695db9 1 e8ea/Presentation/PublicationAttachment/d978b1b5- 6ec3-41f2-bObd-4332bf8d05b4/L-E_Alert_California_8-10.pdf 4. Attached as Exhibit B is a true and correct copy of Wage & Hour Update: Court Awards Attorney Fees To Prevailing Employer In Wage Claim Lawsuit, BARKER OLMSTED & BARNIER, APLC LEGAL UPDATE,Aug. 2010, available at http://www.barkerolmsted.com/news/legal- updates/newsletter0185.php 5. Attached as Exhibit C is a true and correct copy of Posting of Robin E. Weideman, Attorneys’ Fees Properly Awardedto Prevailing Employer in Wage Case, to http://www.callaborlaw.com/archives/283216-print.html (Aug. 3, 2010 7:38 PM). 6. Attached as Exhibit D is a true and correct copy of Kathy Robertson, Employees Ordered to Pay Attorney’s Fees, SACTO. BUS. JOURNAL, Jul. 29, 2010, available at http://sacramento.bizjournals.com/sacramento/stories/2010/07/26/dail y66.html 7. Attached as Exhibit E is a true and correct copy of Posting of Garrett V. Jensen, Employees May BeLiable for an Employer’s Attormeys’ Fees Incurred in Successfully Defending Meal, to http://www.wzllp.com/blog/?post=16 (Aug. 10, 2010 3:09). 8. Attached as Exhibit F is a true and correct copy of Posting of Robert Nudleman,Prevailing Employer in Meal/Rest Break Suit Entitled to Attorneys’ Fees, to http://blog.griegolaw.com/2010/07/28/prevailing-employer-in- mealrest-break-suit-entitled-to-attorneys-fees/ (Jul. 28, 2010). 9. Attached as Exhibit G is a true and correct copy of Recovery of Attorney’s Fees in Wage Claims: California Court ofAppeal Strengthens Prevailing Employers’ Claimsfor Attorney’s Fees In Actions For Unpaid Wages And Benefits, SEYFARTH SHAW LLP ONE MINUTE MEmo, Aug.5, 2010, available at http://www.seyfarth.com/index.cfm/fuseaction/publications.publicati ons_detail/object_id/c5a4a669-ef20-4472-bce2- 4c269df46cal/RecoveryofAttorneysFeesinWageClaimsCaliforniaCo 7 urtofAppealStrengthensPrevailingEmployersClaimsforAttorneysFees inActionsforUnpaidWagesandBenefits.cfm 10. Attached as Exhibit H is a true and correct copy of Special Fee Shifting Provisions: Third District Romps Around The Labor Code’s Bases For Recovery Of Attorney’s Fees, http://www.calattorneysfees.com/2010/07/special-fee-shifting- provisions-third-district-romps-around-the-labor-codes-bases-for- recovery-of-attorneys-fees.html (Jul.27, 2010 10:24 PM). 11. Attached as Exhibit I is a true and correct copy of Court of Appeal Affirms Section 218.5 Attorney Fee Award to Defendant, http://cawageandhourlaw.blogspot.com/2010/07/court-of-appeal- affirms-section- 2185.html?utm_source=feedburner&utm_medium=feed&utm_campa ign=Feed%3A+cawageandhourlaw+%28Califoria+Wage+and+Hou r+Law+for+Employees%29 (Aug. 10, 2010 9:52 AM). I declare under penalty of perjury under the lawsof the State of California that the foregoing is true and correct. Executed in Oakland, California, on August 26, 2010. Boel Ellyn Moscowitz EXHIBIT A AVONYS)Oe labor and employmentalert CORRES gi:more... ‘Pleasecontact anyofthe= _ attorneys in our Labor and Employmentif you have any : questions regardingAlert. ‘ Daniel B. Chammas : dchammas@Venable.com - 310.229.0302 Christin J. Kim : cjkim@Venabie.com 310.229.0306 www.Venable.com August 2010 California CourtEmpowersEmployers ToCollect Attorneys’ Fees From Unsuccessful Claimants For Unpaid Wagesor Missed Breaks In California, employees have been able to assert claims for unpaid wages without any consequencesfor an unsuccessful — or even frivolous — claim. Employeesoften extracted settlements from employers who knew that they would have to spend more moneyfighting a claim than payingit outright. Worseyet, if an employerlost, not only wouldit have to pay the judgment,it would be required to pay its own lawyer, as well as the employee's lawyer. This menu of bad choicesfrequently resulted in the paymentof moneyto undeserving former employee claimants. Arecent decision by the California Court of Appeal has dramatically changed this landscape and created a gateway for employers to recover attorneys’fees from employees who do not prevail on claims for unpaid wages.In Kirby v. ImmoosFire Protection,Inc. (Cal. Ct. of Appeal July 27, 2010), the Court held that an employeris entitled to its attorneys’ fees whenit prevails on a claim for missed breaks or unpaid wages(other than minimum wage orovertime). This development should make an employee think twice before filing such a claim. Factual Background Theplaintiffs in Kirby were two former employees who suedtheir employerforfailure to pay all wagesat each pay period and at discharge,failure to pay overtime wages,andfailure to provide restperiods.Plaintiffs movedfor class certification, which the trial court denied. In the subsequent month,plaintiffs dismissed the entire action with prejudice againstall parties. Following dismissal, the employer moved to recoverits attorneys’ fees from plaintiffs under Cal. Labor Code § 218.5. The trial court granted the employer's motion for attorneys' fees and awardedit $49,846.05.Plaintiffs appealed. Fee-Shifting Under Cal. Labor Code 218.5 At issue in Kirby was Cal. Labor Cade § 218.5's fee-shifting provision, which providesthat in an “action brought for the nonpayment of wages,fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorneys’fees and costs to the prevailing party. . . .” Section 218.5, however, contains a carve-out exception for “an action for which attomeys'fees are | recoverable under Section 1194". Section 1194 is a unilateral fee-shifting provision that entitles only employees to recover : attorneys’ fees and costs against employers. Thus, § 218.5 does notapply to claims for unpaid overtime wages anda failure to pay the minimum wage. The central issue on appeal was whether the employer's attorneys’ fees were recoverable under§ 218.5. The court held that the employer may recover attomneys' fees for successfully defending against individual causesofaction alleging nonpayment of wages, fringe benefits, or contributions to health, welfare and pension funds underthe fee-shifting provisions of § 218.5. Even if a complaint © also allegesfailure to pay minimum wage and unpaid overtime wages under § 1194, an employer that prevails on other causes of action for nonpayment of regular wagesisstill entitled to its attorneys’ fees. The court expressly foundthatthis entitled employers to | attorneys' fees for prevailing on causes of action for missed mealbreaksorrest breaks. : Future Implications for Employers California employers are no longer subject to claims for unpaid wages and missed breaks without any firepoweroftheir own. Most importantly, employees no longer get a “free whack”to see if their claim for allegedly unpaid wageswill force a settlement, because employees no longer havenothing to lose byfiling such a claim. Now, employers can credibly threaten to obtain a sizable judgment against employeesthat should cause them to abandonfrivolous or weak wage claims. Although many such awards may not ultimately becomecollectiblein full, the prospect of such a recovery materially swings the balance of powerin disputes over unpaid wages and missed breaks and gives employers important leverage that they should usewisely. For any questions regarding how this case mayaffect your business, or to eam more about labor and employment claims applicable under Cal. Labor Code §§ 218.5 and 1194, please contact partner Daniel Chammasor associate Christin Kim of Venable's Labor and Employment group in Los Angeles. if you havefriends or colleagues who would find this alert useful, please invite them to subscribe at www.Venable, com/subscriptioncenter, CALIFORNIA MARYLAND NEW YORK VIRGINIA WASHINGTON, DC 1.8388.VENABLE | www.Venable.com ©2010 Venable LLP.This alert is published by the law firm VenableLLP.It is not intended to provide legal advice or opinion. Such advice may only be given whenrelated to specific fact situations that Venable has accepted an engagementas counsel to address. EXHIBIT B Wage & Hour Update: Court Awards AttorneyFees To Prevailing Employer In Wage Claim Lawsuit Liecan be a los- ing proposition even for employers with strong defenses, what with legal fees and other costs. Many employment laws entitle the winning em- ployee to recover fees, but do not provide the same remedy for winning em- ployers. But there are a few exceptions. A recent California appellate court case titled Kirby v. Im- moos examined one such exception in the context of a Labor Code claim for wages. Anthony Kirby and Rick Leech, Jr. sued their employer, Immoos Fire Protection, Inc. for violat- ing various California la- bor laws as well as the unfair competition law (Cal. Bus. & Prof. Code, § 17200 et seq.). Immoos successfully defended against allegations of la- borlaw violations brought by two former employees. The court subsequently awarded $49,846.05 in attorney's fees to Immoos for its defense of causes of action for failure to pay (Continuedfrom page 2) able to document infrac- tions. An employee will be hard pressed to refute the record at the EDD hear- ing. wages due and failure to provide rest periods. The court awarded fees under LaborCodesection 218.5. So far so good, but the employees appealed. They argued that the em- ployer was not entitled to collect attorney fees, be- cause they had also sued under other Labor Code sections barring employer attorney fees, and those sections, they argued, trumped Section 218.5. When Can An Em- ployer Recover At- torney Fees? Generally, a party may recover attorney's fees only when a statute or agreement of the par- ties provides for fee shift- ing. Typically in the em- ployment context there are no written agreements calling for attorney fees in the event of a legal dis- pute. For the most part, attorney fees are awarded in lawsuits involving stat- utes that provide for an awardoffees. For example, the Fair Employment and Housing Act (FEHA) pro- vides that the prevailing employee may recover attorney fees. The Califor- nia Labor Codealso pro- vides that prevailing em- ployees may recover at- torney fees. Labor Code Section 1194 permits the winning employee to re- cover attorney fees for overtime and minimum wage claims. However, that section does not al- low a prevailing employer to recoverfees. For the most part, winning employers don’t recover attorney fees, but there are exceptions. La- bor Code Section 218.5 providesfor fee shifting in favor of the party that prevails on a claim for unpaid wages and speci- fied benefits. Unlike over- time/minimum wage claims under Section 1194, which allows only employees to recover at- torney fees, Section 218.5 allows the winning em- ployee or employer to re- coverfees. Immoos relied on Section 218.5 when it ap- plied for recovery of its fees. It argued that the employees had made un- successful claims for un- paid wages and rest pe- riod penalties, and Sec- tion 218.5, rther than 1194 applied. Attempting to avoid the attorney fees, the em- . ployees argued that while their lawsuit sought un- paid wages, it also sought overtime pay. They ar- gued that therefore the attorney fee rules in Sec- tion 1194 should coverall claims in the case. The appellate court rejected the employees’ argument. It ruled that Section 1194 applies only Generally, a party may attorney's fees only when a statute or agreement of the parties provides for fee recover shifting. The California Labor Codeis very specific about what information must be included on an employee’s wage statement (paystub). Wage and Hour Update: Employer Beats Hyper-technical Wage Statement he California Labor Code is very specific about what information must be included on an employee’s wage state- ment (paystub). Em- ployee-side attorneys of- ten sue employers over technical violations of this rule. For example, an em- ployer is required to list the “total hours worked” during the pay period— but is it sufficient to list the total regular hours and the total overtime hours, or must the em- ployer also list the total combined hours? Such issues are grist for the employmentlaw litigation mill. A California court recently addressed this issue in a case titled Mor- gan v. United Retail. Lawyers Seek A Payday Off Of Em- ployee Paystubs Class Action Mr. Morgan was em- ployed by United Retail as a non-exempt co-manager from about October to November 2005. During this time, United Retail issued to each non- exempt California em- ployee a weekly itemized wage statement that in- cluded information re- garding the employee's hours worked, wages earned, rates of pay, de- ductions from pay, and other similar topics. For employees who did not work any overtime hours during the pay pe- riod, their wage state- ments listed the total regular hours worked by the employee, which equaled the total number of hours worked. For employees who worked overtime hours during the pay period, their wage statements separately listed the total regular hours worked and the total overtime hours worked by the employee. However, the statements did not add the regular and overtime hours to- gether and list the sum of those hours in a separate line. Morgan filed a class action complaint against United Retail for violation of various wage and hour laws, including a statutory claim for violation of sec- tion 226. Morgan alleged that United Retail’s wage statements failed to com- ply with the requirements of section 226 because the statements showed regu- lar hours and overtime hours worked, but did not add the two together to show the total hours worked by the employee. (Continued on page 5) (Continuedfrom page 3) to causes of action for minimum wageand over- time. If an employee loses on a minimum wage or overtime cause of action, the employer cannot re- cover fees. However,if the employee loses on an un- paid wage or rest period claim, the employer can in fact recover its fees from the employee. Some accounting was in order to determine exactly how much fees should be awardedto the employer. The employer could not recover its ex- penses for the time the attorneys spent defending the minimum wage and overtime claims. The at- torneys would have to accountfor the time spent defending the unpaid wage and rest period claim. Practical Tips: Although the case is good news for employers, as a practical matter, employ- ers cannot count on col- lecting attorney fees from former employees. Many employees are not in a financial position to reim- burse the employer for such fees. Nevertheless, few employees want to face the prospect of a judgmentlien on property and the black mark on credit. This may be suffi- cient to dissuade some employees from making unmeritorious wage claims. EXHIBIT C California Labor & Employment Law Blog: Attorneys’ Fees Properly Awarded to Prevaili... Page 1 of 1 Posted at 7:38 PM on August 3, 2010 by Cal Labor Law Attorneys’ Fees Properly Awardedto Prevailing Employer in Wage Case By Robin E. Weideman In Kirbyv. Immoos Fire, a California court held that attorneys’ fees were properly awarded to an employer whoprevailed in a putative class action alleging missed rest breaks. The court relied on the bilateral fee-shifting provision of Labor Code section 218.5, which provides that the prevailing party in an action alleging violations of certain provisions of the Labor Codeis entitled to recoverits attorneys’ fees. Section 218.5’s fee-shifting provision excludes actions alleging claims for unpaid minimum wagesor overtime wages covered by Labor Codesection 1194 (which has a unilateral fee shifting provision allowing only a prevailing plaintiff to recover attorneys’ fees). In this case, the plaintiff alleged (among other things) a claim for unpaid overtime wages,as well as a claim for missedrest periods. The court held that the employer could not recoverits fees incurred in defending the overtime claim, but could recoverits fees incurred in defending the rest period claim. This case presents a positive development for employers by providing precedent for an award of attorneys’ fees in actions alleging mealand rest period violations should the employer prevail. http://www.callaborlaw.com/archives/2832 16-print.html 8/26/2010 EXHIBIT D Employeesordered to pay attorney's fees - Sacramento Business Journal Page | of 1 Sign Ja / Reaqister Sacramento Business Journal - July 29, 2010 feacrarmento/stories/20 10/07/26/daily66 htm SRERAMLETS BUSINESSJOURNAL Remeney puted cacemniere THe Thursday, July 23, 2010 Employees ordered to pay attorney's fees Sacramento Business Journal - by Kaihy Robertson Staff writer A California appeals court has ruled that an employerthat defeats a claim for alleged missed rest periods cangetits attorney's fees paid by the workers whofiled the losing lawsuit. The Third Appellate District Court of Appeal ruled Tuesdayin Kirbyv. ImmossFire Protection Inc. In 2007, Anthony Kirby and another former employee sued the Wiltonfire companyforalleged unfair competition andlaborlaw violations. The plaintiffs also requested class certification on behalf of other employees like them. Whenthetrial court deniedclass status, the plaintiffs dismissed the case — but the trial court awarded attorney's fees on three of the causesof action. Kirby appealed theruling. The appeals court reversed award of attorney’s fees on twoof the causes of action but sent the matterback to thetrial court to award attorney's fees on a complaint that Immossfailed to provide Kirby with rest periods. A proliferation of lawsuits are beingfiled in California alleging violations of labor lawrelated to employee meal andrest periods, Sacramento attorney Bob Redigersaid in an e-mail. Many are broughtas class actions, and plaintiffs’ attorneys sue for one hourof straight time pay for each employee for each alleged missed mealor rest period. The lawsuits seek waged for four years for each employee — and attorney’s fees. “In Kirbyv. ImmossFire Protection Inc., the court held that an employerthat defeats a claimsfor alleged missed rest breaks ... may obtain an award ofattorney’s fees against the unsuccessful employees who brought the action,” Rediger said. “The Kirby court's decision should also applyto successful employers who prevail against a claim for alleged missed meal periods.” Ellyn Moscowitz, an Oakland lawyer who represents Kirby, said Thursday she plans to file a petition for hearing by the state Supreme Court. “Wegot mostofit reversed,” she said. “We thinktheyare flat out wrong onstate lawthat deals with wages.” All contents ofthis site © American City Business Journals Inc. All rights reserved. http://sacramento.bizjournals.com/sacramento/stories/20 10/07/26/daily66.html?t=printable 8/26/2010 EXHIBIT E Wesierski and Zurek LLP Page | of 2 Employees May BeLiable for an Employer's Attorneys’ Fees Incurred in Successfully Defending Meal August 9, 2010 By: Garrett V. Jensen The 3rd District Court of Appeals recently held in Kirby v. Immoos Fire Protection that Labor Code Section 218.5 provides for fee shifting in favor of the party that prevails on a claim for unpaid wages and specified benefits; however, it does not allow employers to recover fees in any action for minimum wagesor overtime compensation. Immoos wasallowed to recover for defense of Kirby's sixth cause of action for failure to provide rest periods, but not for Kirby's first (unfair practices act) and seventh (violation of Labor Codesection 2810--entry into contracts by parties who knew that the contract failed to provide sufficient funds for paymentof all required wages) causesof action. Labor Code Section 218.5 provides: "In any action brought for the nonpaymentof wages,fringe benefits, or health and welfare or pension fund contributions, the court shall award attorney's fees and costs to the prevailing party if any party to the action requests attorney's fees and costs upon the initiation of the action....[paragraph] This section does not apply to any action for which attorney's fees are recoverable under Section 1194." Plaintiff cited to Murphy v. Kenneth Cole Productions, a 2007 California Supreme Court case which held that the additional hour of compensation for a missed rest break constituted a wage, in support of his argumentthat any unpaid wageisless than the statutorily mandated wages and therefore subject to section 1194, The 3" District Court of Appeals disagreed in examining the Murphy Court's description of the remedy of the remedial hour of compensation as premium pay. Thus, as an addition to regular pay, the remedy wasnotoneforfailure to pay the minimum wage and would not be subject to section 1194. The Kirby decisionillustrates that an employee maybeliable for the attorneys’ fees an employer incurs in defending against claims for missed meal andrest breaks if the employee does not prevail on those claims. In light of Kirby, employers should continue to keep accurate records of whattranspired. Posted by: on: Aug 10, 2010 @ 03:09 http://www.wzllp.com/blog/?post=16 8/26/2010 EXHIBIT F Prevailing Employer in Meal/Rest Break Suit Entitled to Attorneys’ Fees « California Em... Page | of ! Prevailing Employer in Meal/Rest Break Suit Entitled to Attorneys’ Fees July 28, 2010 by Rob In 2000, the California legislature added someteeth to California’s meal and rest break laws. Prior to 2000 employers were required to give employees meal andrest breaks, but there was no penalty if the employer refused to allow employees to take their legally mandated breaks. In 2000 the legislature enacted California Labor Code Section 226.7 which requires employers to pay an additional hour’s pay for each day in which a meal and/orrest break is not provided. The California Supreme Court later decided that the additional hour’s payis a “wage” and not a “penalty.” See Murphy v. Kenneth Cole. Since that time we havesince a proliferation of suits alleging a violation of Labor Code Section 226.7. If court filings are to be believed there is hardly an employee in California that is allowed to take the required meal and rest breaks. I rarely see an overtimecasefiled that does not include a missed meal and/or rest break claim. Whenthe court first decided MurphyI recall thinking about how it would affect the attorneys’ fees provisions in the Labor Code. Under Labor Code Section 1194 the prevailing employeeis entitled to recoverhis/her attorneys’ fees in an action for unpaid minimum wageor overtime. The employer can never recoverits attorneys’ fees in an unpaid minimum wageor overtime case. Labor Code Section 218.5, however, allows the “prevailing party” to recover attorneys’ fees in any action for nonpayment of wages other than minimum wagesor overtime. Based on Murphyandthe language of Labor Code Sections 218.5 and 1194, I theorized that an employerthat successfully defeats a claims for unpaid meal and/or rest breaks would beentitled to recover its attorneys’ fees. In the common unpaid overtime case where the employee“throws in” a claim for missed meals/rest breaks I believe the employeeis at risk of having to pay a portion of the employer’s attorneys’ fees even if the employee prevails on the unpaid overtime claim unless the employee also prevails on the missed meal/rest break claim. Well, the Third Appellate District agrees. In Kirby v. ImmoosFire Protection (10 C.D.O.S. 9451), the court came to the same conclusion I did: because a claim for missed meal/rest breaksis a claim for “wages” other than minimum wage and overtime, an employee who doesnot prevail on those claims is liable for the employer’s attorneys’ fees incurred in defending against those claims. Attorneys representing employees in unpaid overtime and minimum wagecasesneedto carefully consider whether to include the unpaid meal/rest break claim. Considering the fact that employers are not required to force employeesto take rest breaks (whetherthis is true with regard to meal breaks remains to be seen)orto track the rest breaks (whichis not the true with regard to meal breaks) means prevailing on a rest break case maybedifficult. Good attorneys will carefully interview their clients, and hopefully other percipient witnesses, before deciding to add the rest/meal breaks claim as a matter of course. Employers should nottreat this as a license to violate the law. To the contrary. Although you may be able to offset a judgment against you by the amount awardedto youin attorneys’ fees, actually collecting an award of attorneys’ fees is usually problematic at best. The best policy is to know the law, follow the law, and ensure you have accurate records reflecting what occurred. But you already knew that! http://blog.griegolaw.com/2010/07/28/prevailing-employer-in-mealrest-break-suit-entitled-... 8/26/2010 EXHIBIT G Recovery ofAttorney’s Fees in Wage Claims: California Court ofAppeal Strengthens Prevailing Employers’ Claims For Attorney's Fees In Actions For Unpaid Wages And Benefits Under California law, a party may recover attorney's fees only when a statute or agreementof the parties specifically provides for fee-shifting. California Labor Code Section 218.5is a fee-shifting statute generally providing for the recovery of attorney's fees by the prevailing party (either employee or employer) in actions for unpaid wages and employmentbenefits. Labor Code Section 1194 also provides for an award of attorney's fees in actions for unpaid overtime or minimum wages,but only to the prevailing employee. On July 27, 2010, in Kirby v. ImmoosFire Protection, Inc., the California Court of Appeal ruled on the following issue: May a prevailing employer recover attorney's fees under Section 218.5 when the lawsuit includes both claims for unpaid minimum or overtime wages, and other wage claims? The Court of Appealaffirmed the trial court’s award of attorney's fees to the employer under Section 218.5, holding that the inclusion of a claim for unpaid minimum or overtime wages does not preclude recovery of attorney's fees by a prevailing employer for separate causes of action otherwise subject to Section 218.5. Anthony Kirby filed a class action against his former employer, !mmoosFire Protection, Inc., for various Labor Codeviolations as well as violation of the Unfair Practices Act (Business and Professions Cade Section 17200 et seq.) Kirby dismissed the case after the trial court denied classcertification. The trial court subsequently awarded attorney's fees to Immoosin part for its defense of Kirby’s cause of action forfailure to authorize and permit rest periods. in reaching its decision, the Court of Appeal harmonized Labor Code Sections 218.5 and 1194. Section 218.5 includes an express exceptionto its provision allowing an award of attorney's fees to prevailing employers: “This Section does not apply to any action for which attorney's fees are recoverable under Section 1194.” Section 1194 provides that employees—but not employers—whoprevail in an “action” to recover unpaid minimum wagesor overtime may also recover their reasonable attorney's fees. Arguing that an “action”refers to an entire case, Kirby asserted that Immoos could not recover fees because his complaint included causes of action for unpaid minimum and overtime wages. The Caurt of Appeal disagreed, holding that Kirby's approach would lead to absurd results asit “would allow the exception of Section 1194's unilateral fee-shifting to eviscerate the rule of Section 218.5." Moreover, plaintiffs would be able to insulate claims against employers from otherwise applicable fee-shifting provisions by simply adding a causeof action for unpaid minimum or overtime wages. The court also rejected Kirby's characterization of his cause of actionforfailure to provide rest periods as one for unpaid minimum wages. Kirby alleged that he was owed an additional hour of wages per day per missed rest period under Labor Code Section 226.7. According to Kirby, any unpaid wage is necessarily less than statutorily mandated wagesand therefore ; PRG 7 ; oar ie Bas : a a : a | SItoltgE DTelta SCae subject to Section 1194. The Court of Appeal disagreed.If Kirby's claim forfailure to provide rest periods had succeeded, he would have beenentitled to an additional wage “at the employee'srate of compensation” under Labor Code Section 226.7. The “employee's rate of compensation”refers to the contractual rate of compensation, not the legal minimum wage. Thus, Kirby's claim was not one basedonanyfailure to pay the minimum wage, and Section 1194 did not apply. Although the Court of Appealaffirmed the trial court's award of attorney's fees to Immoosfor prevailing on the rest period cause ofaction, the court reversed the trial court's award of attorney's fees to Immoosforprevailing on Kirby's Labor Code Section 2810 and Unfair Practices Act causes of action. The Court of Appeal remanded the case backto thetrial court to determine the reasonable amountof fees to award to Immoosfor prevailing on the rest break causeof action only. What Kirby Means For Employers While Kirby will not halt thefiling of class actions for unpaid wages and benefits, it will cause attorneys to think twice about filing marginal complaints for wage claims subjectto the bilateral fee-shifting provision of Section 218.5. Kirby also gives employers additional leverage in negotiating settlements of wage and hour class actions where the prospectof successin certifying the class or on the merits is in question. For moreinformation, please contact the Seyfarth attorney with whom you work, or any Labor and Employmentattorney on our website. SEYFARTH ATTORNEYS LLP Breadth. Depth. Results. www.seyfarth.com BeaCueuemukeCueDuetgeceUncAaaNROareaRMneeCoecleaoe akonakeneayRoceAectipeietieracca Rescate ate intended for generat information purposes only, and yau are urged to consult a lawyer conceming your ownsituation and any specific legal questions you may have. Any tax information or writen tax advice contained herein (including any attachments) is not intended ta be and cannot be used by any taxpayer for the purposeof avoiding tax alia that may be imposed on the taxpayer. (Tha foregaingnadie Lr en affixed pursuant io. U.S,Treasury Regulations governing tax practice.) © 2010 Seyfarth Shaw LLP. All rights reserved: aan oy ; Lo EXHIBIT H CALIFORNIA ATTORNEY'S FEES: Special Fee Shifting Provisions: Third District Ro... Page 1 of 2 CALIFORNIAATTORNEY'S FEES July 27, 2010 Special Fee Shifting Provisions: Third District Romps Around The Labor Code’s Bases For Recovery ofAttorney’s Fees Third Appellate District RemandsSo Trial Court Can Determine Reasonable Fees for Employer WhoSuccessfully Defended Against Alleged Failure to Provide Rest Periods. The next caseis all about entitlement to attorney’s fees under the Labor Code. Kirby v. Immoos Fire Protection, Inc., No. Co62306 (3rd District July 27, 2010) (published). Onappeal,plaintiff/employee Kirbyfirst challenged an awardoffees under Labor Codesection 218.5, a bilateral fee-shifting provision subject to a carve-outthatis unilateral in favor of employeesfor any action for which fees are recoverable undersection 1194. “Section 218.5 providesfor fee shifting in favor of the party that prevails on a claim for unpaid wagesandspecified benefits. . . . This section does not apply to any action for which attorney's fees are recoverable under Section 1194.” Section 1194 relates to actions for minimum wagesor overtime compensation. Therefore, the question was whether the ambiguous word“action” applied to the entire lawsuit, or just to claims for minimum wagesor overtime compensation. Thelatter, said the Court. Thus,if a cause of actionis part of a larger lawsuit, for which the employer could recover for other causes of action undersection 218.5, a prevailing employercanstill do so — only the individual causes of action for minimum wagesor overtime compensation result in unilateral fee shifting in favor of the employee. Second, Kirby arguedthatthe unilateral fee-shifting provision in section 1194 barred recovery to the successful employer who defendedagainstan alleged failure to provide rest periods. Kirby analogizedfailure to provide rest periodsto a claim of failure to provide minimum wages. One whois denied rest period isn’t being paid minimum wagefor her time. Nope,said the Court,the failure is to provide a rest period, not to provide a minimum wage. Third, the Court held that section 2810is a unilateral fee-shifting statute that disallows an awardoffees to defendant employers. By providing that “[a]n employee ... may recover costs and reasonable attorney's fees” uponprevailing, section 2810 doesnot authorizefee shifting in favor of employers.” Section 2810 provides(in part) that a person maynotenterinto a labor contract with a construction contractor, knowing that the contract does not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governingthe labororservices to be provided. Fourth, the Court explainedthatit is settled that the Unfair Practices Act does not provide for an award of attorney’s fees to any party. Fifth, the Court determined that defendant/respondent Immooscould only recoverfor the successful defense against the alleged wrongfully denied rest periods, requiring a remand and determination of reasonable fees. Andthe winneron appeal? None. It’s a mixed decision. Each party bears its own costs and attorney’s fees on appeal. Posted at 10:24 PM in Cases: Special Fee Shifting Statutes | Permalink Like http://www.calattorneysfees.com/2010/07/special-fee-shifting-provisions-third-district-rom... 8/26/2010 EXHIBIT I The California Wage and Hour Law Blog: Court of Appeal Affirms Section 218.5 Attorn... [Share Report Abuse Next Blog» Page | of 8 Create Blog Sign tn THE CALIFORNIA WAGE AND HOUR LAW BLOG WRITTEN BY LOS ANGELES, CALIFORNIA MEDIATOR AND ATTORNEY STEVEN G. PEARL TUESDAY, AUGUST 10, 2010 Court of Appeal Affirms Section 218.5 Attorney Fee Award to Defendant The First District Court of Appeal has affirmed an award of attorney fees to a defendant under Labor Code section 218.5. Kirby v. Immoos Fire Protection, Inc. (July 27, 2010) --- Cal.App.4th ---. Theplaintitfs filed a putative class action forviolation of the Unfair Competition Law ("UCL") and California wage and hourlaws. After the court denied classcertification, the plaintiffs settled with a numberof defendants and dismissed the action with prejudice as to the remaining detendant, Immoos. Immoos movedfor attorney fees under Labor Codesection 218.5. The Court awarded Immoosits fees incurred in defending plaintiffs’ causes of action for violation of the UCL,rest period requirements, and Labor Code section 2810. The Court ofAppeal reversed the awardof attorney fees on the UCL cause of action. Kim Kralowec hasa good discussion of the UCL issue on her blog, the UCLPractitioner. The Court also reversed on the 2810 causeof action. For those not familiar with it, section 2810 providesin pertinent part: (a) A person orentity may not enter into a contract or agreementfor labororservices with a construction, farm labor, garment, janitorial, or security guard contractor, where the person or entity knows or should knowthat the contract or agreementdoes not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governingthe laboror services to be provided. Immoos was not a defendant on the 2810 causeofaction, and the Court of PUT OUR EXPERTISE TO WORK FOR YOU. Call our office for a free consultation: (818) 995- 8300 x 102. Attorneys: The Pearl Law Firm will consult or co- counsel on yourcase, bringing value and results for your clients. Call Steve Pearl at (818) 995-8300 X 101, Mediate with Steven Pearl. My knowledge of wage andhourlaw, my credibility on bothsides of the bar, and mydesire to help people resolve their cases allow me to mediate veryeffectively. Contact Nikki Safavi at (818) 995- 8300 x 102 or nikki@sgpearl.comto calendar a mediation. http://cawageandhourlaw.blogspot.com/2010/07/court-of-appeal-affirms-section-2185.html... 8/26/2010 Appealheld that it could not recover attorneyfees on this causeofaction. The mostinteresting issue is on the plaintiff's rest period claim and the relationship between Labor Code sections 218.5 and 1194. The Court put this issue as follows: [Plaintiff] contendsthe trial court erred in awarding anyattorney's fees to[defendant] because someofthe causesof action were subject to the unilateral fee shifting provision in favorof plaintiffs provided by section 1194. [Plaintiff] points out that section 218.5 includes an express exceptiontoits bilateral fee-shifting provision, which states: “This section does not apply to any action for which attorney's fees are recoverable underSection 1194.”(Italics added) Arguing that an “action”refers to an entirecase,[plaintiff] concludesthat the inclusionofcausesofaction subject to section 1194 bars [defendant's] recoveryof any attorney's fees in this case. Wedisagree. Slip op,at 3. The Court first noted that 218.5(b) codifies the holding in Earleyv. Superior Court (2000) 79 Cal.App.4th 1420.Earleyheld that 1194 controls in an action for unpaid overtime compensation, and 218.5 does notallow a successful defendantto recoverits fees in such an action. After reviewing thelegislative history, the Court then held that the section 1194 exceptionto section 218.5 applies "only to causes of action for unpaid minimumand overtime wages."Slip op.at 6. We harmonizesections 218.5 and 1194 by holding that section 218.5 applies to causes of action alleging nonpaymentof wages, fringe benefits, or contributions to health, welfare and pension funds.If, in the samecase, a plaintiff adds a cause of action for nonpayment of minimum wagesor overtime, a defendant cannot recover attorney's fees for work in defending against the minimum wageor overtime claims. Nonetheless, the addition of a claim for unpaid minimum wagesor overtime does not preclude recoveryby aprevailing defendantfor a cause of action unrelated to the minimum wage or overtimeclaim so long as a statute or contract providesforfee shifting in favor of the defendant. Slip op. at 6. SHARE | POSTED BY STEVEN G. PEARL AT 9:52 AM al LABELS: ATTORNEY FEES, BUSINESS AND PROFESSIONS CODE SECTION 17200, REST BREAKS The California Wage and Hour Law Blog: Court of Appeal Affirms Section 218.5 Attorn... Page 2 of 8 NOW AVAILABLE FROM CONTINUING EDUCATION OF THE BAR (CEB) California Wage and Hour Law andLitigation, Co- Authoredby Steven G. Pearl ABOUT ME STEVEN G. PEARL ENCINO, CALIFORNIA “Steven G. Pearl is an attorney and mediatorin Los Angeles, California. He is a co-authorof California Wage and HourLaw and Litigation, published by California's leading legal publisher, Continuing Education of the Bar (CEB). VIEW MY COMPLETE PROFILE CVof Steven G. Pearl LINKS TO RELATED PAGES The Pearl LawFirm, A Professional Corporation http://cawageandhourlaw.blogspot.com/20 10/07/court-of-appeal-affirms-section-2185.html... 8/26/2010 o O S e N D A F F W D L O — B O R Q R O R w m m e k k k Kirby and Leech v. ImmoosFire Protection, Inc. Case No. 07AS00032 PROOF OF SERVICE (CCP 1013) Iam a citizen of the United States and an employeein the County ofAlameda, State of California. I am overthe age ofeighteen years andnota party to the within action; my business address is 1629 Telegraph Avenue, 4" Floor, Oakland, California 94612. On August 27, 2010, I served uponthe following parties in this action: [xX] [X] Robert Rediger Laura McHugh 555 Capitol Mall, Suite 1240 Sacramento, CA 95814 Appellate Coordinator Office of the Attorney General 300 S. Spring Street Los Angeles, CA 90013 BY FEDERAL EXPERSS Supreme Court of California 350 McAllister Street San Francisco, CA 94102 BY MESSENGER copies of the document(s) described as: Honorable Loren E. McMaster Sacramento Superior Court 720 Ninth Street Sacramento, CA 95814 California Court of Appeal Third Appellate District 621 Capitol Mall, 10" Floor Sacramento, CA 95814 BY FEDERAL EXPRESS REQUEST FOR JUDICIAL NOTICE (FEDERAL EXPRESS OR OTHER OVERNIGHT SERVICE) _I deposited the sealed envelope in a box orotherfacility regularly maintained by the express service carrier or delivered the sealed envelope to an authorized carrier or driver authorized by the express carrier to receive documents. BY MESSENGERSERVICE.I served the documents by placing them in an envelope or package addressedto the personsat the addresseslisted above and providing them to a professional messengerservice. I certify under penalty of perjury that the aboveis true and correct. Executed at Oakland, California, on August 27, 2010. PROOF OF SERVICE Vor. Ore, Maria Anderson