Wednesday, January 27, 2016
New Law on Attorney Fees Applies to Pending Cases—C.A.
Statute Effective in 2014 Says Employer Can Only Get Fee Award if Employee Sues in Bad Faith
By KENNETH OFGANG, Staff Writer
Legislation affecting recovery of attorney fees by prevailing parties is procedural and applies to cases pending when such a law is enacted, the First District Court of Appeal ruled yesterday.
Div. One reversed an attorney fee award by a Contra Costa Superior Court judge in favor of a laborer who sued his former employer unsuccessfully for Labor Code violations. The panel said §218.5 of the code—which took effect after the employer won its summary judgment motion but before the fee award was made, and which bars an award to an employer unless suit was brought in bad faith—precludes the award.
The panel did, however, affirm the underlying summary judgment, holding that it is not an unfair employment practice to enter into a contract requiring an employee who receives specialized training that is not a job requirement to reimburse part of the cost if he or she leaves employment within 30 months of completing it.
The rulings stem from competing claims between Floyd Case and USS-POSCO Industries. The company hired Case in 2007 and offered him entry into its “learner program.”
The program, established in consultation with Case’s union, permitted up to 10 lower-level employees to collect wages and benefits while training to become skilled “maintenance technical electrical,” or MTE, workers. The company and union agreed that, because the three-year program cost the company $46,000 per worker, the participants would be required to sign partial reimbursement agreements.
Case was accepted into the program and signed the agreement, which obligated him to reimburse the company $30,000, less $1,000 for each month he remained employed after completing the training, if he left voluntarily or was fired for cause.
He subsequently acknowledged that he did so because he wanted to become an engineer, and that he understood that participation was voluntary and that there were other paths to qualifying as an MTE worker, but said he did not think he could pass the MTE test without going through the learner program.
Two months after completing the program, he accepted a post as a high voltage electrician at Lawrence Livermore National Laboratory. USS-POSCO sued him for $28,000, and he filed a cross-complaint, on behalf of a class of similarly situated workers and as a representative plaintiff under the Labor Code Private Attorney General Act.
He alleged in the cross-complaint that the reimbursement agreement violated various Labor Code sections, as well as the Fair Labor Standards Act, the Unfair Competition Law, and Business and Professions Code §16600, which deals with restraints on the right to practice a profession.
Trial Court Ruling
Judge Steven K. Austin granted the company’s summary judgment motion, and judgment was entered for USS-POSCO in the amount of $28,000. The judge subsequently awarded the company $80,000 in attorney fees, less than half of what it asked it for.
The attorney fee hearing was held in early 2014, shortly after the current version of §218.5 took effect. Austin, however, applied the version in effect at the time the company won its summary judgment motion and filed its fee motion; that version permitted the prevailing party in an action for wages, benefits, or pension plan contributions, with no distinction between prevailing employers and employees.
But Justice Patricia Banke, writing for the Court of Appeal, said the present version of the statute applies and bars the award.
The justice acknowledged that federal authority favors USS-POSCO on the issue and that California cases are split. But two California Supreme Court decisions—one involving a statute governing recovery of a premium bond as an item of costs, and the other the private attorney general statute—stand for the proposition that a change in a statute governing court procedure applies to pending cases, Banke said, and those holdings are binding.
The case is USS-POSCO Industries v. Case, A14057.
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