A case out of the United States First Circuit Court of Appeals demonstrates just how expensive employment lawsuits can be for employers. The Court held that a massive disproportionality between a plaintiff’s $7,650 award and a $104,626 award for attorney’s fees and costs did not render that amount invalid.
In Diaz v. Jiten Hotel Management, Inc., an employee brought an age discrimination lawsuit against her employer under both federal and Massachusetts law. The employee prevailed and her attorneys were awarded over $100,000 for their work on the case. On appeal, the employer argued that the state provision which provided for payment of attorney’s fees was not meant to encourage lawyers to spend far more in resources than could be recovered in court. The First Circuit disagreed, highlighting the importance of the legal rights involved, including permitting a party to enforce a claim through the court system without regard to cost. Therefore, the Court stated, disproportionality alone is not enough to overturn a lower court’s award of attorney’s fees. In the case at bar, the employer did not assert that the amount was based on an unreasonably excessive number of hours or rate of pay. That fact combined with the broad discretion given to lower courts in determining attorney’s fees, required affirmation of the award.
Any employer that has been dragged into litigation should be aware from the outset whether the plaintiff may recover attorney’s fees and costs in pursuit of a claim. That knowledge could substantially impact an employer’s decision on how best to proceed in defending a lawsuit.
If you have any questions regarding costs of anticipated litigation, please contact any of the attorneys at Royal LLP at (413) 586-2288.