Solis v. Clean Harbors, Inc.

Background

Abraham Solis signed a three-page employment agreement with Aerotek, a staffing agency, for a temporary assignment with Aerotek’s client, Clean Harbors. The agreement identified Solis as Aerotek’s employee, stated that his Aerotek employment would last for the duration of the Clean Harbors assignment, and provided that Aerotek would supply workers’ compensation coverage for on-the-job injuries. It also stated that the prevailing party in covered disputes would be entitled to recover reasonable attorneys’ fees and costs.

On January 15, 2019, Solis’s right thumb was crushed while he was helping with machine maintenance at Clean Harbors’s facility. He underwent emergency surgery and ultimately lost the thumb. Solis received workers’ compensation benefits through Aerotek and later filed a negligence lawsuit against Aerotek and Clean Harbors for further recovery for the same injury. The defendants removed the case to federal court. The court later granted the defendants’ motion for summary judgment, ruling that Aerotek and Clean Harbors were Solis’s joint employers for workers’ compensation purposes and were therefore immune from tort liability for the injury.

The defendants then moved for $75,000 in attorneys’ fees under the employment agreement. They argued that Aerotek could enforce the fee provision as a party to the agreement and that Clean Harbors could enforce it as a third-party beneficiary. Solis argued that the provision was unenforceable, did not apply to Clean Harbors, and did not cover the negligence claim. He also argued that the requested amount was unreasonable.

Enforceability of the Fee Provision

The court applied California law. Solis argued that the fee provision was unconscionable, meaning so unfair when agreed to that it should not be enforced. The court agreed that the employment agreement was a take-it-or-leave-it standardized form drafted by Aerotek, which created a low degree of procedural unconscionability. But the court found no significant oppression or surprise and no substantive unconscionability, meaning no excessively harsh or one-sided term. The provision expressly allowed the prevailing party to recover fees, so it was mutual. The court therefore held that the provision was enforceable.

Solis also argued that Aerotek’s alleged failure to pay him for work on January 15, 2019, was a material breach that released him from his obligations under the agreement. The court rejected that argument. The agreement required Solis to submit verified time records and required Aerotek to pay him for hours reflected on those records. Solis did not dispute that he had not submitted a time record for January 15. The court further held that, even if Aerotek’s failure to pay constituted a breach, Solis had not shown that it was material enough to excuse his obligation concerning attorneys’ fees.

Whether the Defendants Could Recover Fees

The court held that the fee provision was broad enough to cover Solis’s negligence claim. It applied to disputes or claims arising out of or relating in any way to Solis’s employment or relationship with Aerotek. Solis’s negligence claim concerned the defendants’ alleged duty to provide a safe workplace during his assignment, so it related to his employment relationship with Aerotek.

Aerotek could enforce the provision because it was a party to the employment agreement. The court also held that Clean Harbors could enforce it as a third-party beneficiary, meaning a non-signing person or entity that the contracting parties intended to benefit from the agreement. Clean Harbors was identified as Aerotek’s client in the agreement, and multiple provisions addressed Clean Harbors’s rights and protections. The agreement’s limitation-of-liability provision specifically sought to protect Clean Harbors from personal-injury claims arising from Solis’s employment and directed Solis to seek workers’ compensation remedies. The court concluded that allowing Clean Harbors to recover fees was consistent with the agreement and the parties’ expectations.

The court found that both defendants were prevailing parties because they had successfully defended the negligence action. It therefore held that both were contractually entitled to attorneys’ fees.

Amount of the Award

The defendants requested $75,000, although they reported incurring approximately $160,000 in fees. They submitted counsel’s declaration, redacted invoices, and unredacted invoices for the court’s private review. The court found that the hourly rates—ranging from $375 to $460 for partners and senior counsel, $300 to $310 for associates, and $195 to $215 for paralegals—were consistent with local rates. It also found that the 486.50 hours claimed were reasonable given the litigation’s complexity, duration, and nature. The fact that the requested award was less than half of the fees incurred did not make it unreasonable.

Disposition

Judge Alex Tse granted the defendants’ motion for attorneys’ fees. The court awarded defendants $75,000 in attorneys’ fees from Solis.