Attorney Fees Under the Colorado Wage Claim Act
Lester appealed a jury verdict awarding him $12,307.69 in unpaid compensation based on breach of an implied contract with defendant, The Career Building Academy (TCBA). TCBA is a Colorado nonprofit corporation that provides vocational training, with an emphasis on residential construction, to high school students.
In 2011, Lester orally agreed to work as TCBA’s chief operating officer. Rick Johnson, TCBA’s founder, promised to pay Lester an annual salary of $150,000, of which $75,000 would be paid by TCBA and $75,000 by Johnson Heating and Plumbing (JHP).
During his first six months, Lester was paid twice, totaling $7,884 in gross pay. Lester resigned and sent a wage demand to TCBA. TCBA rejected the demand, contending that Lester agreed to volunteer as chief operating officer. Lester sued TCBA and JHP, seeking unpaid wages and compensation, as well as penalties and attorney fees.
A jury determined Lester had entered into an implied contract with TCBA and returned a verdict in his favor for $12,307.69. The court dismissed Lester’s claim against JHP. Following the verdict, Lester requested that the court award him statutory penalties and attorney fees under the Colorado Wage Claim Act (CWCA). TCBA argued that the CWCA did not apply to an implied contract. After applying factors in Carruthers v. Carrier Access Corp., 251 P.3d 1199 (Colo.App. 2010), used to determine an award of attorney fees to prevailing employers, the trial court denied the request.
On appeal, Lester argued it was error to apply the Carruthers factors to a prevailing employee who is presumptively entitled to an award of attorney fees. The Court of Appeals agreed. CRS §8-4-110(1) allows a court to award costs and attorney fees to the prevailing party on a CWCA claim. Unlike a prevailing employer, a prevailing employee is presumptively entitled to attorney fees under the CWCA. The attorney fee issue was remanded for reconsideration under the correct standard by the trial court.
Lester also argued it was error for the trial court to have, sua sponte, dismissed his claims against JHP as a matter of law. The Court found no reversible error. It also determined that because JHP was neither a member of TCBA nor an individual, the alter ego doctrine could not be applied to it.
The Court held that if the trial court decides that Lester is entitled to attorney fees in the trial court, Lester also should be awarded appellate attorney fees. The denial of attorney fees under the CWCA was reversed and the case was remanded to the trial court to consider Lester’s request for attorney fees, incurred in the trial court and on appeal.
If you have been terminated and not paid all your earned wages, contact Denver Employment Lawyer Gregory A. Hall to discuss your case: