Total Articles: 5
Sue An Employee, But Pay For Attorneys' Fees?
Employers defending wage claims in proceedings before the California Labor Commissioner are not permitted to file complaints or cross-claims against their employees, but that's not the case when a complaint is filed in civil court. Employers faced with complaints from employees seeking unpaid wages may have grounds to file cross-complaints based upon employee misconduct, or they may file a direct lawsuit. An employer may be eager to file such complaints to help "settle the score" where the suing employee committed serious wrongs against the company.
California Appellate Court Rejects Automatic Attorneys' Fees to an Employee who Successfully Defends Against Lawsuit by Employer
California Labor Code section 2802 generally requires employers to indemnify their employees for losses the employee incurs within the scope of employment. As one common example, section 2802 requires an employer to indemnify an employee for attorneys' fees if the employee is sued by a third party, such as a customer, concerning conduct that falls within the scope of employment. But what about legal fees incurred by an employee in defending against a lawsuit by the employer itself, such as for unfair competition or misappropriation of trade secrets?
California Appellate Court Rejects Automatic Attorneys' Fees to an Employee who Successfully Defends Against Lawsuit by Employer
When an employee is sued by his or her employer for alleged wrongdoing related to the job, and the employee wins, does the employer have to pay the employee's attorney fees? In Nicholas Laboratories, LLC v. Chen,1 published on October 12, 2011, a California Court of Appeal answered “no,” at least not under California Labor Code section 2802.
AN UNEVEN PLAYING FIELD.
The Fair Employment and Housing Act (FEHA) includes a simple provision awarding attorney's fees: "In actions brought under this section, the court, in its discretion, may award to the prevailing party reasonable attorney's fees and costs, including expert witness fees . . . ." Govt. Code 12965(b). The statute's text does not distinguish between employees and employers. However, the courts do not treat employers' and employees' fee requests the same.
Attorney Fee Awards Favor Employers.
In employment law cases, attorney fee awards often add insult to injury. On top of large damage awards, courts often award substantial attorney fees to the employee's lawyer. Many labor and employment laws, such as the California Labor Code and the Fair Employment and Housing Act, include attorney fee provisions.
