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Reducing Exposure to Attorneys' Fees

By William (Bill) Wortel and Matt Baisley
August 21, 2010

Sooner or later, a defense attorney will find himself or herself defending an employment lawsuit involving a clear statutory violation or a very bad fact pattern that almost surely will result in a jury verdict in favor of the plaintiff-employee. In these situations, the obvious strategy is to resolve the lawsuit through a monetary settlement. This is because the value of the claim and the defendant-employer's corresponding exposure continue to increase throughout the course of litigation in the form of back pay accrual and both parties' attorneys' fees, since the vast majority of federal and state employment laws contain an attorney fee-shifting provision requiring the defendant to pay a successful plaintiff's attorneys' fees (in addition, of course, to the defendant-employer's contractual obligation to pay its own attorneys' fees). And although a prevailing plaintiff is entitled to his/her costs and attorneys' fees under these statutes, a successful defendant is entitled only to its costs (e.g., filing fees, court reporter fees, etc.) and not an award of attorneys' fees.

Altering the Settlement Posture

These one-sided fee-shifting provisions dramatically alter the settlement posture of employment cases. Unlike litigation in other contexts in which the litigation process reduces the value of the plaintiff's claim through the accrual of attorneys' fees that cannot be recouped even if the plaintiff prevails, a plaintiff in an employment case has every incentive to litigate a strong claim through trial because the plaintiff has a statutory entitlement to an award of reasonable attorneys' fees if a plaintiff's verdict is obtained.

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