Cal. Courts Split on Whether 998 Offers Apply in Employment Cases

Timothy Kowal, Esq.
November 12, 2020

If you are making or considering a CCP 998 offer in an employment case, note the current split of authority. In some cases, an employee making an unsuccessful overtime claim could be made to pay employer's costs under CCP 1032. That rule is adopted in the Fourth District, Div. 2. But the Second District, Div. 3, and the Sixth District reject that rule.

And now so does the Fourth District, Div. 1 in Cruz v. Fusion Buffet (Cal. Ct. App. - Nov. 10, 2020), concluding Labor Code 1194, governing minimum wage and overtime claims, "is intended to operate as a one-way fee and cost shifting statute." Thus, there is no role for CCP 1032 to play. And as CCP 998 offers only augment costs under CCP 1031 and 1032, they don't apply.

In the Cruz case, employee sued his employer restaurant and its two owners on an alter ego theory. The owners each made 998 offers for all of $1 each. Cruz prevailed against the restaurant, but got zilch against the owners.
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