When a Plaintiff prevails in certain employment matters, the Defendant must pay Plaintiff’s reasonable attorneys’ fees and costs in addition to the amount awarded by the jury. This has long been a problem for employers defending against employment-related lawsuits, because even if an employee wins only a small amount of money from the lawsuit, the employer could potentially be on the hook for a far greater amount in attorney’s fees. In a recent case, Jiten Hotel Management learned this lesson the hard way.
In 2008, Carmen Diaz sued her former employer Jiten Hotel Management, Inc. alleging six claims, including a state and federal claim for employment discrimination. Ultimately, her state and federal age discrimination claims proceeded to trial. At trial, the jury found that Jiten had discriminated against Diaz on the basis of age and awarded her $7,650 in compensatory damages. Thereafter, the court awarded Diaz $93,945 in attorneys’ fees and $10,681 in costs. Jiten filed an appeal with the First Circuit Court of Appeals arguing that the fee award must be reduced because it was not proportionate to the jury award. The First Circuit disagreed.
In its decision, the court noted that the attorneys’ fee award is determined by multiplying a reasonable hourly rate by the hours reasonably expended and that the trial court did not abuse its discretion when calculating the award. The First Circuit noted that the fee-shifting rules are “designed to encourage attorneys to take these types of cases and are based on full compensation for the work performed.” The court also noted that Jiten did not argue that the rate was too high or that the Plaintiff’s attorney spent an unreasonable amount of hours on the matter. The sole argument made by Jiten was that the attorneys’ fee award was not proportional to the jury verdict. The First Circuit rejected that argument and reasoned that trial courts have “extremely broad discretion” when determining fee awards and that there had been no abuse of discretion in this case. The case is Diaz v. Jiten Hotel Management, Inc., No. 13-1444 (1st Cir. 2013).
This case makes clear that a Plaintiff who succeeds on certain employment claims is entitled to her reasonable attorneys’ fees, even if those fees are not proportional to the jury award.