Saturday, January 16, 2010

New Employment Case Limits Right to Recover Attorneys Fees

We might have known it was coming since I reported about being subpoenaed to testify that attorneys fees were unwarranted in a Federal employment case because the employer would have settled for the same amount as the ultimate verdict in a mediation that took place six months before trial...but now the California Supreme Court has decided that an employee may not be entitled to recover attorneys fees in a meritorious employment case where the amount in controversy (or the ultimate verdict) is too small to have warranted the fees incurred. The decision -- Chavez v. City of Los Angeles -- tilts the balance between employee and employer interests in employment cases a little towards the employer by allowing trial courts to deny attorney fee recoveries to plaintiffs who only recover a small amount.

In Chavez, the Plaintiff was awarded $11,500 for FEHA violations, but the Attorneys submitted a fee bill of $840,000. Prior to this decision, the Court didn't have the discretion to deny attorneys fees, although they could be taxed pursuant to motion. Now, if the Court thinks they're out of balance with the value of the case, it can deny the fees. Game changer!

I have often seen the threat of huge legal fees tip the evaluation towards settling a case that otherwise has relatively low damages in employment actions. Although the cases are not frivolous, they may have limited value without the additional threat of legal fees.

Plaintiff's attorneys will likely be scrutinizing the intake on these cases more thoroughly where the damages are low. Employees who have been wrongly terminated may have less access to quality attorneys to take their cases where damages are small. Indeed, I'm going to assume that more of these cases will be settled earlier and through mediation than assuming the risk and expense of trial in light of this decision.

Interesting development in light of the economic recession in our generally pro-employee liberal State.

Sunday, January 3, 2010

The New Year: A Chance to Re-set

I love New Years. Like so many of life's phenomena, I see it as a metaphor for the mediation process. It's a chance to change our paths, review and re-do bad decisions, look towards the future. It's a chance to take stock of what worked and didn't, and to make up our minds to make things better in the future. One of my favorite messages of the New Year came from my friend and colleague, Deborah Rothman, who advocated for abandoning "The Bucket List" (of dreams yet unfulfilled) for "The F**k It List" (giving up those hopes that are never to be realized). It's a gentle surrender, and yet one that is so liberating!
To that end, there was an interesting article this morning in the New York Times by Barbara Strauch about Adult Learning, called "How to Train the Aging Brain". There is good news: "The brain, as it traverses middle age, gets better at recognizing the central idea, the big picture. If kept in good shape, the brain can continue to build pathways that help it's owner recognize patterns, and as a consequence, see significance and even solutions much faster than a young person can." So there's my chance to "reset": a good consolation for another year of age: I begin to see the "big picture" faster--and even can glean a solution to the biggest challenges that lie ahead. Now if I could just figure out the technical re-set mechanism...