In most employment cases, the employer must account for the risk of being liable to the plaintiff/employee for his or her attorneys’ fees incurred in the case if it loses the case. At times, the amount of the fees at stake can be substantial.
The extent of this risk faced by the employer is illustrated by a recent case from the Ninth Circuit Court of Appeals. In Muniz v. United Parcel Service, Inc. (issued on Dec. 5, 2013), the former employee brought various claims against her employer, UPS. Before trial, several of her claims were resolved or abandoned, and ultimately the employee went to trial on her gender employment discrimination claim alone. At the close of trial, the employee asked the jury to award her over $700,000. However, the jury awarded her only $27,280.
After trial, both UPS and the employee requested an award of attorneys’ fees. The district court rejected UPS’ request for fees and awarded the employee nearly $698,000 in fees and costs—more than 25 times the amount of the damages determined by the jury! (While the amount of attorneys’ fees awarded by the district court was high, it was significantly lower than the $1.95 million in attorneys’ fees requested by the employee.)
On appeal, the Ninth Circuit affirmed the district court’s attorneys’ fee award (except for $55,286 in paralegal fees that the employee had not adequately proved). Thus, while UPS has to pay the employee $27,280 in damages, it also has to pay over $640,000 to cover the employee’s attorneys’ fees.
While this case may be somewhat of an outlier, it does illustrate the risk of attorneys’ fees in litigation, even when the employer may be able to prove that the employee’s damages were relatively small.
If you have questions regarding this topic or other employment matters, please contact a member of our employment group or call 208.344.6000.