Recovering Attorneys Fees in Employment Cases

It is a good thing when attorneys’ fees are recoverable in a case

In general, it means there is more money to go around.  Most employment cases are handled on a contingency basis, meaning that the attorney working on the case will take a percentage of the money recovered at the conclusion of the case.  If the attorney does not get any money for the client, then the attorney does not get paid.  Only when the client obtains a verdict or settlement does the attorney get paid for his or her efforts.  This creates a unity of interest between the attorney and client wherein both individuals are motivated to obtain the best result possible.  The more money there is, the better it is for everyone involved. The ability to recover attorneys’ fees in addition to damages makes a case more valuable overall. Stated quite simply, attorneys’ fees awards can be huge.  It is not uncommon for an award of attorneys’ fees made after a trial to be hundreds of thousands of dollars. So, it is definitely a good thing to have a case that allows for the recovery of attorneys fees.

Personal injury cases are also handled on a contingency basis

However, there is usually no way for a personal injury attorney to collect additional money for his fees. This is because California, and most states for that matter, follow the so-called “American Rule” when it comes to recovering attorneys’ fees and costs.  Under this rule, each party to a lawsuit pays their own attorneys’ fees. (Trope v. Katz (1995) 11 Cal.4th 274; Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3rd 498.) California Code of Civil Procedure section 1021 codifies this rule, stating that an attorney’s compensation is left to be decided between the individuals involved.  This means that each side pays there own attorneys’ fees. California Code of Civil Procedure section 1021 specifically states that the “each party bear their own fees” rule may be changed by an agreement between the parties or when “attorney’s fees are specifically provided for by statute.” In other words, attorneys’ fees may be recoverable by a successful litigant if there is a contract which allows for the winning party to recover the same (Cal. Civil Code §1717), or attorneys’ fees may be recoverable where the statute provides for the recovery of attorneys’ fees.

Generally speaking, There are not many statutory schemes that shift the recovery of attorneys’ fees.

But in the area of employment law, there are a fair number of fee-shifting statutes.  For example, the Fair Employment and Housing Act (FEHA) is the law that prohibits all types of discrimination, harassment and retaliation and it contains a fee-shifting provision (Cal. Gov’t Code §12965(b).)  California Labor Code sections also provide for the recovery of attorneys’ fees for wage and hour claims.  In fact, it is more unusual for an employment law case not to contain a cause of action for attorneys’ fees than vice versa. However, it does happen. There are certain claims that do not allow a former employee to recover their attorneys’ fees when they successfully sue their former employer.  For example, attorneys’ fees are not normally recoverable in whistleblower cases brought under California Labor Code section 1102.5.   California employment laws contain many for the recovery of one of the defendant litigants’ costs. Sometimes it may appear that attorneys’ fees are not available in a case, but an experienced and capable attorney may be able to make some creative arguments to put at least the prospect of recovering attorneys’ fees in play.

By Janeen Carlberg

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