Typically, in our court system, we operate under the “American Rule” which means that parties have to pay their own attorneys’ fees in cases, regardless of whether they win or lose. (Contrast that with the English Rule which is a “loser pays” system.)
But there is one big exception to the American Rule — and it can be found in lots of employment law cases. In several instances, the governing statute allows the prevailing party (or, in some instances, just the Plaintiff — read “employee”) to collect attorneys fees.
This is often seen in wage & hour claims, where an overtime claim may get dwarfed by a claim for attorneys’ fees. One blog pointed out a few years ago in an FLSA case on “how attorney’s fees can grow to be the tail that wags the dog.”
A recent case out of the District Court of Connecticut also shows the impact in employment discrimination cases too.
The decision flows from a jury trial that awarded damages in an employment discrimination case to an individual suing a major employer. Afterwards, both parties engaged in extensive post-trial litigation concerning attorneys’ fees, damages and more. Ultimately, the court issued a ruling and then a final ruling after both parties asked for reconsideration.
The court awarded the Plaintiff in the discrimination claim the following:
- Compensatory damages: $125,000
- Punitive damages: $175,000
- Economic damages (back pay): $ $243,711.89
- Pre-judgment interest (on back pay): $15,665.37
So, ultimately, the verdict is a little more than $550,000.
But the court also awarded attorneys’ fees. And these fees far exceeded the verdict itself.
Grand total? $973,083.50 in attorney’s fees and $30,960.24 in costs.
Such awards make employment cases unique animals in the law. They provide extraordinary incentives to attorneys to not only take such cases, but pursue them.
For employers, the case is a difficult reminder that even when you value the case as somewhat small based on damages, the award of attorneys’ fees can add a substantial amount to what a case is worth.