Appeals Court Awards Costs to Worker in Wage Case

Takeaway: Employees who prevail in actions to recover unpaid minimum and overtime wages are entitled to reasonable attorney fees and court costs irrespective of the amount recovered.

A pizza delivery driver who sued his employer for minimum wage and overtime violations and was awarded less than $8,000 was entitled to recover reasonable litigation costs, a California appeals court ruled. Employees who prevail in actions to recover unpaid minimum and overtime wages are entitled to reasonable attorney fees and court costs under California Labor Code Section 1194, subdivision (a), irrespective of the amount recovered, the court said.

The employee worked as a delivery driver for a pizza restaurant from February 2014 to June 2015. In February 2018, he sued the restaurant for failure to pay minimum and overtime wages, among other claims. 

After nearly four years of litigation and extensive discovery, the matter was set for trial in October 2021. After a seven-day trial, the jury ruled in favor of the employee on his minimum wage and overtime causes of action. The employee recovered $7,660.

The employee moved for attorney fees totaling $296,920 and $26,933 in costs, but the trial court refused to award any fees or costs. The court found that the employee acted in bad faith by artificially inflating his damages figure and including claims he never intended to pursue to justify filing the case as an unlimited civil proceeding. The trial court noted that the employee sought $26,160 at trial, just over the jurisdictional amount for an unlimited civil proceeding. The trial court also found the case was severely overlitigated, noting that the employee had propounded 15 sets of written discovery requests and noticed 14 depositions despite only admitting 12 exhibits at trial.

In denying the employee’s request for attorney fees and litigation costs, the trial court stated that the plaintiff’s case was extremely straightforward, demanded little skill and clearly should have been brought in limited jurisdiction (where the maximum amount that can be awarded is $25,000). The trial court relied on Code of Civil Procedure Section 1033, subdivision (a), which gives trial courts discretion to deny prevailing plaintiffs their litigation costs when plaintiffs file their case as an unlimited civil proceeding but only recover an amount available in a limited civil case. 

The employee appealed, arguing that the trial court should have awarded him reasonable litigation costs under Labor Code Section 1194, subdivision (a) and abused its discretion by applying Code of Civil Procedure Section 1033, subdivision (a) to deny those costs in their entirety.

Labor Code Section 1194, subdivision (a) provides that any employee receiving less than the legal minimum wage or the legal overtime compensation to which the employee is entitled may recover the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest, as well as reasonable attorney fees and litigation costs.

Code of Civil Procedure Section 1033, subdivision (a) provides that court costs should be determined by the court in its discretion in a case other than a limited civil case where the prevailing party recovers a judgment that could have been obtained in a limited civil case.

The California Supreme Court has explained that this provision applies when a plaintiff has obtained a judgment for money damages in an amount—now $25,000 or less—that could have been recovered in a limited civil case, but the plaintiff did not bring the action as a limited civil case.

The appeals court first concluded that Code of Civil Procedure Section 1033, subdivision (a) and Labor Code Section 1194, subdivision (a) are irreconcilable such that concurrent operation is impossible.

On the one hand, the court said, Code of Civil Procedure Section 1033, subdivision (a) gives the trial court discretion to deny litigation costs altogether when it finds the plaintiff failed to take advantage of the efficiency of a limited civil proceeding, as evidenced by the plaintiff’s recovery of less than the jurisdictional threshold.

On the other hand, the court continued, Labor Code Section 1194, subdivision (a) provides for a mandatory award of reasonable litigation costs when an employee prevails on unpaid minimum and overtime wage claims, irrespective of the amount recovered.

Thus, the court said, one statute gives the trial court discretion to deny litigation costs based on the amount recovered while the other provides for a mandatory cost award regardless of that amount.

Generally, when two statutes conflict, the court explained, a specific statute will take precedence over a general one, and a more recently enacted statute will take precedence over an earlier one.

Here, the court said, the amendment to Labor Code Section 1194 mandating the recovery of reasonable attorney fees was enacted in 1991, while the relevant portion of Code of Civil Procedure Section 1033, subdivision (a) was enacted in 1953, so Labor Code Section 1194, subdivision (a) is clearly the more recently enacted statute.  

Moreover, the court said, Labor Code Section 1194, subdivision (a) is the more specific statute relative to Code of Civil Procedure Section 1033, subdivision (a) because it applies only to wage and hour actions and not all civil actions.  

The court therefore held that Labor Code Section 1194, subdivision (a) controls, and employees who prevail in actions to recover unpaid minimum and overtime wages are entitled to their reasonable litigation costs, irrespective of the amount recovered. It expressed no opinion on the reasonableness of the employee’s request for litigation costs but remanded the matter for the trial court to determine a reasonable fee and cost award.

Gramajo v. Joe’s Pizza on Sunset Inc., Calif. Ct. App., Nos. B322697, B323024 (March 25, 2024).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.