Dane-Elec Corp. v. Bodokh (CA4/3 G055312 5/24/19) A Defendant Employer’s Attorneys’ Fees may be granted under Labor Code section 218.5 under very limited circumstances. California Labor Code section 218.5 is an attorney fee‑shifting statute in actions for nonpayment of wages, prohibits a prevailing party employer from recovering attorney fees unless the trial court finds the employee brought the wage claim in bad faith.
The Dane-Elec Corp case presented an issue regarding a prevailing party employer’s right to recover contract‑based attorney fees from an employee. Usually if the wage claim by the Employee is not in bad faith the analysis stops there. The Court of Appeal examined when the wage claim was inextricably intertwined with a contract claim for which the employer would otherwise be contractually entitled to recover attorney fees may teh employer recover fees? Thankfully, the Court held that unless the trial court finds the wage claim was brought in bad faith, Labor Code section 218.5, subdivision (a) (section 218.5(a)) prohibits, as a matter of law, an award of attorney fees to a nonemployee prevailing party for successfully defending a wage claim that is inextricably intertwined with a claim subject to a contractual prevailing party attorney fees provision. To the extent the wage claim and the contract claim are inextricably intertwined, section 218.5(a)’s prohibition on recovering attorney fees controls over the contractual attorney fees provision. https://www.courts.ca.gov/opinions/documents/G055312.PDF
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