LOS ANGELES (Legal Newsline) - A recent ruling by the California Supreme Court has cleared the way for lawyers to earn $280,000 for negotiating a $15,000 settlement
It's happening in Raquel Betancourt's lawsuit against her former employer OS Restaurant Services, which she claimed failed to provide meal and rest breaks. The Second Appellate District originally ruled her lawyers under state law couldn't recover fees as the "prevailing party" for bringing such claims - they'd only be able to if the case involved wage-and-hour claims.
But the Supreme Court found earlier this year in a similar case that lawsuits over meal and rest breaks involve wage-and-hour claims and told the Second District to rethink its Betancourt ruling.
With the new instructions, the Second District affirmed a Los Angeles trial court judge's ruling to award $280,000 to Betancourt's lawyers, even though the settlement was for much less.
"(E)xtra pay for missed breaks constitutes 'wages' that must be reported on statutorily required wage statements during employment and paid within statutory deadlines when an employee leaves the job," the Supreme Court ruled in Naranjo v. Spectrum Security Services.
The defendant owns Fleming’s Steakhouse & Wine Bar and allegedly deprived Betancourt of 10-minute breaks during her seven years there. Her lawyers claimed the settlement included wage and hour claims that entitled them to recover fees as the prevailing party.
Betancourt claimed she was retaliated against for reporting a chef who cut raw chicken on cutting boards designated for vegetables. She settled her claims that the restaurant failed to provide meal and rest periods for $15,375.
The language of the settlement also stipulated that resolved were “any and all wage-and-hour-related causes of action that were or could have been asserted in the complaint.”
Afterwards, attorneys at Felahy Employment Lawyers and Yash Law Group sought $580,794 in fees and more than $16,000 in costs, claiming they spent 869.6 hours were incurred. They said the wage and hour claims were “closely intertwined” with retaliation and wrongful termination claims.
The restaurant opposed the request, arguing that existing precedent prevents lawyers from recovering fees when they only prevail on a claim for meal or rest break premium pay.
They also said virtually all discovery focused on the retaliation and wrongful termination claims – not wage and hour.
It was noted that when the plaintiffs lawyer sent a settlement demand of $750,000, the wage claims were less than $13,000 of that. The trial judge found they were owed close to $280,000 in fees for their work.
"After Naranjo, none of the defendants' earlier arguments supports reversal of the attorney fee order," the Second District's most recent decision says. "Naranjo establishes a clear legal basis for the award; the settlement agreement permits an award 'consistent with applicable law'; and there is evidence of counsel time spent on claims for nonpayment of wages as construed in Naranjo."