California employment law

How much is my discrimination case worth?

Mike Ivancie, Esq.

Introduction – Recovering Damages in a Discrimination Case

This article will explain the common forms of damages that an employee can recover when they prevail in their discrimination case. At the outset it is important to note that damages are extremely fact and case dependent, so what a complainant was awarded in one case is rarely predictive of what a complainant will recover in another case. Nonetheless, there are some common types of damages and fact patterns that we can discuss to give you a better understanding of the type of damages you may be able to recover. Finally, we note that the topic of damages and relief is extremely complex, changes often, and that many practicing attorneys regularly have to research the law related to damages. Therefore, it is generally best to get professional advice from a lawyer that specializes in discrimination law.

You can use the Table of Contents to navigate to the section you like, or you can read the article in full.

So you timely filed a formal EEO complaint, went through the investigation process, and to a hearing or trial and received a ruling in your favor. Now, the question is, what can you recover?

Purpose of Discrimination Laws – Appropriate Remedies

The purpose of discrimination laws in general, including Title VII, the Rehabilitation Act, and the ADEA, are to put the person who was subject to discrimination in a position they would have been had no discrimination occurred. Another common way this is phrased is to “make the complainant whole” by providing them remedies and covering costs and other damages they incurred as a result of discrimination. This means that the bulk of the remedies available to someone who has been subject to discrimination focus on putting them in a position they would be had the discrimination never occurred.  For example, if a complainant was wrongfully terminated due to a discriminatory firing, they would be reinstated to their position and provided back pay for the time they were out of work.

Proving Damages in a discrimination case

Damages must be proven in discrimination cases. Generally, with all damages, the more proof the better. Providing conclusory statements about how you have been harmed or the economic losses you have suffered is typically not sufficient. You need to provide evidence in support of your claims when possible. Also note that failing to provide evidence of damages, in some instances, can waive or prevent you from recovering those damages later.

For example, lets say you were subject to a hostile work environment and because of it you started seeing a psychologist. You should provide all the billing statements from your psychologist demonstrating how much you had to pay to receive counseling. If you provide this evidence, you are much more likely to recover damages from the agency for those expenditures in the form of past-pecuniary (economic) damages.

As to the specific burden of proof, complainants must show with reasonable certainty that the employer’s discrimination was the cause of the injury/loss.

Limitations on Damages

There are certain limitations on the type and amount of damages that can be recoved in a discrimination case. The recovery will depend on the size of the employer, and its legal status (government vs. private-sector employer).

42 U.S. Code § 1981a(b) provides for damages and limitations to recovery of certain damages for cases of intentional discrimination cases.

(b) Compensatory and punitive damages

(1) Determination of punitive damages
A complaining party may recover punitive damages under this section against a respondent (other than a government, government agency or political subdivision) if the complaining party demonstrates that the respondent engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to the federally protected rights of an aggrieved individual.
(2) Exclusions from compensatory damages
Compensatory damages awarded under this section shall not include backpay, interest on backpay, or any other type of relief authorized under section 706(g) of the Civil Rights Act of 1964 [42 U.S.C. 2000e–5 (g)].
(3) Limitations
The sum of the amount of compensatory damages awarded under this section for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses, and the amount of punitive damages awarded under this section, shall not exceed, for each complaining party—

(A) in the case of a respondent who has more than 14 and fewer than 101 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $50,000;
(B) in the case of a respondent who has more than 100 and fewer than 201 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $100,000; and
(C) in the case of a respondent who has more than 200 and fewer than 501 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $200,000; and
(D) in the case of a respondent who has more than 500 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $300,000.

(emphasis mine)

No punitive damages against federal government

As you can see above, the federal government is exempt from punitive damages. Therefore if you are a federal employee suing an agency you cannot from seek punitive damages.

Damage caps

As highlighted above, generally there is a cap of $300,000 on compensatory damages for any federal employee seeking redress of discrimination claims.

Types of Damages Explained

There are various types of damages available to complainants in a discrimination case. Below we cover the more common types of damages and provide examples of the types of recovery that fit into each category.

Compensatory Damages

Compensatory damages are awarded to complainants to compensate them for the more intangible types of injuries one can suffer as a result of unlawful discrimination. Compensatory damages are awarded in addition to other remedies under Title VII. As noted above, compensatory damages are subject to caps. Typically, for large and governmental employers, compensatory damages are capped at $300,000. Sometimes compensatory damages are referred to as non-pecuniary damages.

Common examples of compensatory damages

These are just some of the types of compensatory examples that may be subject to recovery. The title of the harm itself does not control, the relevant inquiry is into the harm the complainant suffered and its relation to the misconduct engaged in by the employer.

  • emotional anguish
  • pain and suffering
  • inconvenience
  • loss of enjoyment of life
  • injury to professional standing
  • injury to character and reputation
  • injury to credit standing
  • loss of health

Proving Compensatory Damages

As discussed above, you must not only show that you have suffered a harm but that the harm was the result of the unlawful discrimination. See Gore v. Turner, 563 F.2d 159, 164 (5th Cir. 1977). Proof of compensatory damages is more difficult than economic/pecuniary damages because it is much harder to quantify emotional anguish than it is to quantify moving expenses or medical bills. “Emotional harm may manifest itself, for example, as sleeplessness, anxiety, stress, depression, marital strain, humiliation, emotional distress, loss of self esteem, excessive fatigue, or a nervous breakdown. Physical manifestations of emotional harm may consist of ulcers, gastrointestinal disorders, hair loss, or headaches.” See EEOC Enforcement Guidance: Compensatory and Punitive Damages Available under § 102 of the Civil Rights Act of 1991. Every case is different, but detailed testimony related to your compensatory damages and the harm you suffered is critical to providing these damages and getting a ruling in your favor. In some instances, the testimony of a doctor may be necessary to help prove damages. Further, when compensatory damages are in issue in the case, employers can sometimes require a complainant to receive a medical examination to aid them in the determination of potential damages. See EEOC Management Directive
MD-110 Chapter 7.

Pecuniary Damages (Also called economic damages)

Pecuniary is legal speak for monetary or economic loss. The definition of pecuniary is “of, relating to, or consisting of money.” Accordingly, you can think of pecuniary damages as economic or monetary damages. These are damages that relate to concrete expenses incurred, or that will be incurred as a result of the discrimination.

Pecuniary losses include, moving expenses, job search expenses, medical expenses, psychiatric expenses, physical therapy expenses, and other quantifiable out-of-pocket
expenses that are incurred as a result of the discriminatory conduct. To recover damages, the complaining party must prove that the employer’s discriminatory act or conduct was the cause
of his loss. The critical question is whether the complaining party incurred the pecuniary losses as a result of the employer’s discriminatory action or conduct. Also, the costs should be reasonable. It would be unreasonable for a person to seek reimbursement of shopping expenses because “retail therapy” was the only way they could feel better about the discrimination they had to face.

Past vs. Future Pecuniary/economic damages

Past economic (pecuniary) damages are generally concrete and can be proven easily. Examples include medical or counseling bills. Future economic damages are more difficult to quantify and are inherently speculative as they seek to cover future and semi-foreseeable economic harms.

Lets say a complainant was subject to a hostile work environment, and during the hearing her treating psychologist testified that she thought the complainant would need counseling for additional year to recover from the discriminatory acts. The cost of that additional year of counseling is an example of a future pecuniary, or economic, damages award.

Regarding the cap on compensatory damages discussed above, future-pecuniary damage awards are subject to that $300,000 damages cap, whereas past-pecuniary damages are not. See EEOC Enforcement Guidance: Compensatory and Punitive Damages Available under § 102 of the Civil Rights Act of 1991.

Attorney’s Fees

When there is a finding of discrimination the complainant can be awarded reasonable attorney’s fees. Typically, these fees go directly to the attorney but in some instances they can be used to offset any payment the complainant made to their attorney, making the representation effectively free. Your eligibility for an award of attorney’s fees will depend on the theories you advanced. Also, only attorney’s can receive attorney’s fees, so if you represent yourself, you will not be awarded attorney’s fees.

Punitive damages

In some instances, punitive damages are awarded if the misconduct in question was particuarly egregious. Punitive damages are awarded to the complainant but are used to punish the offender and deter future misconduct. Punitive damages are available only if the complaining party demonstrates that the respondent engaged in discrimination “with malice or reckless indifference to the federally protected rights of an aggrieved individual.”

As noted above, punitive damages are not available in discrimination cases against the government or federal agencies.

Duty to Mitigate Damages

Complainants have a duty to mitigate damages in discrimination cases. Accordingly, you cannot recover for any harm that you could have avoided or minimized with reasonable effort on your part.

Say an employee is wrongfully terminated for discriminatory reasons. They promptly file a case but it takes a few years to litigate and resolve. If the employee never tries to get another job their eventual backpay award may be offset by a reasonable salary they could have earned had they looked for work. The defendant in the discrimination case will have the burden of proving a complainant failed to mitigate damages. Nonetheless, it is important that complainants be aware of this duty to mitigate and take steps to do so when appropriate. Fleming v. County of Kane, State of Ill., 898 F.2d 553, 560 (7th Cir. 1990) (the burden is on the employer to prove, as an affirmative defense, that the employee failed to mitigate damages when seeking lost wages). However, in federal sector cases their is no duty to mitigate during the administrative process.

Additional Resources

Conclusion

Hopefully this article gave you a better idea of the types of damages available in a discrimination case and the kind of evidence that you need to prove those damages. As stated in the introduction, damages depend greatly on the facts of your case and you need to be mindful that outcomes in other cases may not be predictive of the likely award in your case. Additionally, because the law related to damages is evolving and complex it is best to have an experienced attorney to advise you on what types of damages may be available in your case and what evidence you need to gather to help prove your damages.

 

Related posts:

Fast Legal Answers: What is at-will employment?

Mike Ivancie, Esq.
In today’s Fast Legal Answers series I am addressing a core employment law topic: at-will employment. The rules related to at-will employment control the bulk of private sector employment arrangements, yet many employees have no idea what at-will employment is.

 

What is at-will employment? At-will defined.

At-will employment is what it sounds like, you serve at your own will, and the will of your employer. So, you can leave your job at any time, and your employer can terminate your employment at any time.
At-will employment is explicitly recognized in California Labor Code section 2922, which provides:

An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.

The above labor code section also means that, absent a specific term to the contrary, there is a presumption that all employment in California is at-will employment.

 

This concept is simple enough, but when you think about it, the implications are pretty harsh. Based on the simple definition alone, this means if you are an at-will employee whether on your second day of work, or the day before your 30th work anniversary, your boss could come in and fire you for any or no reason at all. The California Supreme Court has echoed this sentiment “[a]n at-will employment may be ended by either party `at any time without cause,’ for any or no reason, and subject to no procedure except the statutory requirement of notice.” Guz v. Bechtel National, Inc., 24 Cal.4th 317, 335 (2000).

 

If I am an at-will employee and I’m fired does that mean I cannot challenge my termination?

No. In some instances your status as an at-will employee may drastically limit your ability to challenge your termination but depending on the facts of your case you may have a great argument that your employer violated a law when they fired you, or that based on some agreement, the employer could not terminate you the way they did.  Obviously, there are laws that limit the ability of the employer to fire someone for certain reasons, like if the firing decision is founded on a discriminatory animus.

 

So if I am fired, how do I challenge my termination?

Generally, when an employee is terminated two essential arguments are raised: 1) that you were not an at-will employee subject to summary termination at the employer’s will and, 2) your termination was in violation of one or more laws.

 

1. Arguing you were not an at-will employee

Some employees successfully argue that their employment was not actually at-will, but was controlled by some agreement or understanding they had with their employer regarding your relationship.

Contracts

Employers will have employees sign employment agreements or contracts when they are hired. Typically, this agreements will reiterate that the employment is at will and that the employee can be terminated at the employer’s discretion. However, if the agreement contains terms like “the employee will only be terminated for good cause” or other similar terms, that agreement can be used to demonstrate that the employment was not at will.

This is why it is important to retain copies of all agreements you sign when you being your employment. If you can provide these documents to your attorney when you are consulting with them about your termination it will help them determine very quickly whether any arguments can be made regarding your contractual relationship with your employer.

Implied contract claim

Employers often provide their employees with employee handbooks or other written materials.  If these materials suggest that the employment relationship is not at will, or that employees will only be fired “for cause” or for certain misconduct than this would be strong evidence of an implied employment contract. California courts have recognized that when an employer promulgates formal personnel policies and procedures in handbooks, manuals, and memoranda disseminated to employees, a strong inference may arise that the employer intended workers to rely on these policies as terms and conditions of their employment, and that employees did reasonably so rely. Scott v. Pacific Gas & Electric Co., 11 Cal.4th 454, 465 (1995).

Covenant of good faith and fair dealing

In some instances California has recognized that a termination after a long period the implied-in-law covenant of good faith and fair dealing contained in all contracts. This means that if you terminated for no after years of being a model employee, your employer’s actions may violate general notions of acting reasonably and dealing fairly. This theory is difficult to prove, but is recognized in certain instances in California. See, e.g., Pugh v. See’s Candies, Inc., 116 Cal. App. 3d 311 (1981), Cleary v. American Airlines, Inc., 111 Cal. App. 3d 443 (1980).

 

2. Wrongful terminations – firings contrary to law

Even if you are an at-will employee, your termination cannot be the result of an unlawful action. If your employer fires you because you tell them you are pregnant, regardless of whether you are an at-will employee or not, that would be a clear violation of law.

Examples include

  • Laws against discrimination based on:
    • Sex
    • Age
    • Color
    • Race
    • National Origin
    • Pregnancy
    • Disability
  • Using federally protected leave Family Medical Leave Act (FMLA)
  • In some instances, your involvement in the reserves or other military deployments
  • Engaging in protected Whistleblower Activity

I’m not sure if I am an at-will employee or not

So I read everything above, but I still have no idea if I am an at will employee or not…
Well, I don’t blame you, it can be hard to determine whether or not you are an at-will employee. Generally, most employees are considered at-will employees, but the facts of each case are different and need to be reviewed carefully. These issues can be complicated, and seemingly insignificant facts can greatly affect the legal conclusion of whether employment is at-will or not. If you are in doubt you should consult an attorney, explain your case, provide as much documentation as you can, and they will help you to determine your status as an at-will employee and what options you have to challenge your termination.

 

I’m not sure my termination was illegal or not

If you think you were terminated for one of the above listed statutorily protected reasons, you should consult with an attorney to discuss your claim. Essentially these claims require that you demonstrate that your termination was the result of a violation of one of these laws. It can be difficult to prove the motivations of your employer and even more difficult to get evidence from the employer to prove the same. Accordingly, you should consult with an attorney to determine the merits of your case and assist you through the filing of your complaint, the discovery process, and either trial or settlement.

 

Conclusion

Hopefully, this article explained at-will employment and gave you some ideas of the implications at-will employment has for employees facing termination. Now, you should also understand some of the more common theories that are advanced to challenge alleged at-will terminations and are better educated should you be dealing with such issues yourself.

At this time we are not taking on any new clients. All information provided above is for reference purposes and should not be construed as legal advice. You should consult with a licensed attorney before taking any action in your case.

 

Related posts:

Fast Legal Answers: California Education Code § 44929.21 – non-reelection of probationary teachers

Mike Ivancie, Esq.

 

***NOTE TO POTENTIAL CLIENTS: THE IVANCIE LAW PRACTICE IS NO LONGER HANDLING NON-REELECTION OR CALIFORNIA EDUCATOR CASES. THE BELOW INFORMATION IS FOR REFERENCE ONLY***

 

Today in my Fast Legal Answers series I am going to discuss a California Education Code § 44929.21(b). Probably one of the harder-to-read statutes I’ve looked at in a while, it covers the process school districts follow when they decide not to reelect a probationary teacher in California. The relevant part of the statute provides:

(b) Every employee of a school district of any type or class
having an average daily attendance of 250 or more who, after having
been employed by the district for two complete consecutive school
years in a position or positions requiring certification
qualifications, is reelected for the next succeeding school year to a
position requiring certification qualifications shall, at the
commencement of the succeeding school year be classified as and
become a permanent employee of the district.
   The governing board shall notify the employee, on or before March
15 of the employee's second complete consecutive school year of
employment by the district in a position or positions requiring
certification qualifications, of the decision to reelect or not
reelect the employee for the next succeeding school year to the
position. In the event that the governing board does not give notice
pursuant to this section on or before March 15, the employee shall be
deemed reelected for the next succeeding school year.
   This subdivision shall apply only to probationary employees whose
probationary period commenced during the 1983-84 fiscal year or any
fiscal year thereafter.

(emphasis mine)

Can you explain that law in plain English?

The law provides that if a probationary teacher is employed by the district for two consecutive years they will become a permanent (tenured) teacher at the start of their third school year. The district can decide not to reelect a probationary teacher in the first two years of the probationary period.  However, they must do so by March 15th of the last probationary school year. If the district does nothing (doesn’t notify the teacher of non-reelection prior to March 15th) the teacher is deemed reelected for the following year.

What are the core principles of that statue in visual form?

Visual guide to California Education Code § 44929.21

So what reasons does the district have to give for not reelecting me?

Actually, none. If you are a probationary teacher the district can decide not to reelect you for any or no reason at all. All they have to do is get you the notice of non-reelection before March 15 of your second complete school year as a certified probationary teacher. California courts have recognized the great discretion districts have in this regard: The public school district has “the absolute right to decide not to reelect probationary teachers without providing cause or other procedural protections.” Sunnyvale Unified School District v. Jacobs, 171 Cal. App. 4th 168 (Ct. App. 2009).

Well that doesn’t seem fair…

Contrasted with the great amount of protections for permanent teachers it certainly does not seem fair. But this provisions allows districts to weed out underperforming or apparently troubled teachers before they become tenured, and it is much more difficult to fire them. The California Court of Appeals has openly acknowledged this balance “[t]his seemingly draconian provision [talking about § 44929.21(b)]  represents the Legislature’s balance between the rights of the teacher and the overall purpose of the system of public education, which is to educate the young.” Sunnyvale Unified School District v. Jacobs, 171 Cal. App. 4th 168 (Ct. App. 2009).

What are my options?

Well your options are somewhat limited. Since the district has the absolute right not to reelect you while you are a probationary employee, it is very difficult to challenge a non-reelection. Collateral challenges to non-reelections through a claim of protected whistleblowing activity are not always viewed favorably by the courts. See, e.g., Conn v. Western Placer Unified School Dist., 186 Cal. App. 4th 1163, 113 Cal. Rptr. 3d 116 (Ct. App. 2010) (“to exalt these ‘disclosures with whistle[-]blower status would create all sorts of mischief. Most damagingly, it would thrust the judiciary into micromanaging employment practices and create a legion of undeserving protected `whistle[-]blowers’ arising from the routine workings and communications of the job site.”). For courts to accept whistleblowing claims the disclosures need to be of significant magnitude including violations of state or federal law. Claiming that your non-reelection is based on discrimination, say for your sexual orientation, can sometimes be grounds for getting a decision reevaluated or getting concessions from a district. However, discrimination cases are extremely fact dependant.

Ultimately, each case is different. Non re-elections are difficult to challenge; it is an uphill battle. However, if you think your non-reelection was a result of protected whistleblowing activity or discrimination you should contact an attorney. Contact us for a free consultation.

Conclusion

Probationary teachers have drastically limited rights when it comes to non-reelections. If you are a teacher that has been notified of your non-reelection you may want to pursue a resignation in lieu of non-reelection. Districts have broad discretion when it comes to reelection. So, in some cases, rather than trying to fight a reelection it may be better just to move on and find employment elsewhere. If you do want to challenge a non-reelection you need to consider whether your non-reelection was based on your membership in a protected class or a protected disclosure you made.

Hopefully you found this guide helpful. At this time we are not taking on any new clients. All information provided above is for reference purposes and should not be construed as legal advice. You should consult with a licensed attorney before taking any action in your case.

 

Related posts:

Fast Legal Answers: How do I prepare for my deposition?

Mike Ivancie, Esq.

For my third post in the Fast Legal Answers series I will change gears and go from purely legal advice to the more practical. Today, I will be talking about how to prepare for a deposition. I’ll go into the basics about what to expect when your deposition is being taken, common questions, and how to properly respond to especially tricky questions.

Essential things to know before getting your deposition taken

 

What is a deposition?

A deposition is just another way to get testimony from an individual. Typically depositions are taken during the discovery phase of a case.

When you give a deposition you are under oath. This means your deposition testimony has the same weight as if you were testifying in court. So, you should take it as seriously as if you were going to testify in front of a judge and jury even though you are just going into a conference room with a few attorneys and a reporter.

How long does a deposition last?

Typically a deposition will only last one full day. The length of any deposition depends on the complexity of the case itself and other factors, such as the start time and the number of breaks taken.

The rules related to to the maximum length of a deposition will depend on the court or administrative body hearing your case and if the attorney’s have made any special requests for a longer deposition. For example, the federal rules of civil procedure limit a deposition to one day and 7 hours total. FRCP 30(d)(1)

How do I prepare?

Your attorney should work with you the week before your deposition. The attorney should give you advice similar to the advice in this article related to how you should answer questions and when you should ask for clarification.

Obviously, the attorney will need to go over your case in great detail. Focusing on the key issues and explaining the likely questions you are going to get related to those issues. How you approach these questions could be critical to the outcome of your case. There is an old quote lawyers have about their client’s deposition:

You almost never win your case because of your client’s deposition, but you certainly can lose it if things go south.

Answering Questions – Tips and Advice

So the deposition is really all about answering questions the other side’s attorney will ask you. It is important that you make sure you understand the question that is being asked of you. You should also only answer the question being asked. This means you do not volunteer information.

Do not speculate

Questions like, “Why do you think Tom called you after the accident?” call for speculation. Sure, you can probably guess why Tom called you, but you certainly do not know what Tom was thinking and you shouldn’t speculate when you answer questions. A proper response to a question like this would be: “I’m not sure why Tom called me, he is the one who can answer that question.”

If you do not understand a question, ask for clarification

Attorneys sometimes ask terrible-compound-rambling-unclear questions. When they do, which will likely happen a few times in your deposition, simply ask them to rephrase. That way you are clear on the question being asked which allows you to respond appropriately.

Moreover, don’t guess, speculate, or feel forced to answer a question. If you honestly don’t remember, just say so. But do not make up an answer because you feel pressure to give one. If a question is unclear to you it is always appropriate to ask for clarification. Indeed, you should never answer a question you don’t understand.

Answer only the question asked

If a yes or no answer is appropriate then answer with a yes or no only. Volunteering information generally is not a good idea.

Don’t unnecessarily elaborate or volunteer information:

  1. Incorrect approach:
    1. Q: Have you seen the wizard of OZ?
    2. A: Yes, I really was terrified of those flying monkeys. I’ve had nightmares about them the last 30 years.
  2. Correct approach:
    1. Q: Have you seen the wizard of OZ?
    2. A: Yes.

Questions that might seem strange

When you first start your deposition the other attorney may ask you a few questions that sound strange. They may ask you if you have been convicted of a felony, are impaired or under the influence of drugs, or otherwise are have some limitation that would prevent you from answering truthfully and fully. These are foundational questions that are necessary to make sure you are in the right frame of mind. This  prevents you or your attorney from making the argument that the bad answers you gave in your deposition were the result of some medication or other impairment you were suffering from during questioning. Do not take these questions personally, and do not get thrown off by them.

Court reporter tips

Because the court reporter will be creating a transcript of the deposition it is important that only one party talk at a time. So, make sure the attorney finishes his or her question before you start your answer.

Also, clients commonly provide a yes or no answer by shaking their head or mumbling something like “uh-huh.” This leads to an ugly and unclear transcript. So, make sure you give an audible “yes” or “no” to all questions.

Three Golden Rules for depositions:

  1. Tell the truth.

  2. Don’t speculate. It is totally acceptable to say “I don’t know” or “I don’t remember” if that is the truth. But if you know the answer you would be committing perjury if you say “I don’t know” 

  3. Answer only the question asked. DO NOT VOLUNTEER INFORMATION. 

 

Closing

Giving a deposition can be very intimidating, especially if you have never experienced the process before. A good attorney will prepare you ahead of time and get you familiar with the process. They will also inform you of any “landmines” to avoid and issues that are critical to the case. The key is to remain composed and make sure you understand the questions that are asked of you. Go slow, take your time, and do not feel pressured to “make the other attorney happy” with you answers. Finally, if you follow my three golden rules above, you will avoid the majority of the issues that could lead to a bad deposition.

Related posts:

San Diego Employment Attorney, Contingent Fee FAQs

Mike Ivancie, Esq.

Update as of February 2, 2017, The Ivancie Law Practice is no longer taking any new contingent fee federal discrimination cases. We apologize for any inconvenience. 

Do you have an employment case, but no money to fight it?

Then hiring an attorney on a contingent fee basis is probably the best option for you.

Contingent fee agreements are used in many types of employment law cases. Especially, cases where the underlying law allows for attorney’s fees or where the claimant (you) is likely to get a monetary judgment (award) against the other party. These types of cases include discrimination cases, Whistelblower cases, pay and leave cases, and some discipline and wrongful termination cases. You can read more about those types of cases at our Employment Law Guides section.

My practice takes contingent fee cases. If you are interested in learning more about this type of fee arrangement continue reading.

Below are some common questions and answers related to contingent fees in employment cases.

Employment Law Case, Contingent Fee Agreement FAQs

What is a contingent fee?

A contingent fee means that the attorney handling your case doesn’t charge you anything for the time they  spent working on your case, unless you win. Their pay is contingent on you winning. Typically, if they do win your case they get between 20%-40% of the total recovery.

What if I lose my case?

Typically, if you lose you do not owe the attorney anything for the time the attorney spent working on your case. Attorney’s, however, cannot promise to pay the costs of your case for you (filing fees, expert witness fees, etc.). See Cal. Rules of Prof. Conduct 4-210. So in some instances, you may have to pay the costs associated with fighting your case. Make sure you discuss this arrangement with your attorney when you enter into a contract with them to avoid being surprised later.

What if I win my case?

Congratulations! You likely signed a fee agreement with the attorney and it will control how any award is disbursed. For example, lets say you entered into a contingent fee agreement with an attorney where the attorney would keep 33% of any recovery you got and the judge awarded you $30,000 in your discrimination case. The attorney would be entitled to $10,000 (1/3) and you would keep the remaining $20,000 (2/3).

How can costs affect my award in a contingent fee case?

This is a very important, and often overlooked, issue. Costs can add up in any case. It is important that you agree beforehand with your attorney regarding how costs will be paid for if you win your case. The reason this is so important will become very clear with the two illustrations below.

Lets say you win your case and get an award of $30,000. You and your attorney agreed he/she would get a third (33%) of any award. Let’s also assume there were $5,000 in costs. Great. So you’re thinking you are entitled to $20,000, right? Well, it may depend on when costs are taken out.

If costs are taken out before the contingent fee:

The split will look something like this: $30,000 (award) – $5,000 (costs) = $25,000. In that case $25,000, not $30,00 will then be split 66% for you 33% for the attorney.

Then the attorney gets: $8,333.33 (1/3 of $25,000)

You get: $16,666.66 (2/3 of 25,000)

If the fee is taken out first then costs are taken out:

Now lets say the agreement stipulates that the attorney gets his/her 33% first then costs are taken out with you getting the rest. In that scenario:

The attorney would get $10,000, a third of $30,000.

You would get $15,000. ($20,000 remaining minus $5,000 in costs).

See how there is a fairly significant difference between the two recoveries?

It is important you agree beforehand how costs will be taken out because as costs increase, it can greatly affect the amount of money each party ends up actually receiving.

What is a reasonable contingent fee?

Unfortunately, the answer is: it depends. An honest attorney will look at a number of factors when they determine whether to take your case, and the fee to charge. Some of those factors include: the amount of time your case will take to prosecute, the complexity of your case, the strength of your case, the likelihood of winning, and the prevailing rates in local legal community.

To illustrate, if you have a very complicated case with significant factual issues and legal hurdles that will require a great deal of briefing and effort by the attorney, the contingent fee percentage is likely to be higher. Moreover, if you are in a high cost-of-living-area like San Diego you are likely to be charged more.

We won my case, but now I think I paid too much, what can I do?

Generally, you are bound by the terms you entered into when you signed the original fee agreement. The main exception would be if the fee paid was grossly disproportionate to the amount of work done by the attorney. The ethics rules for attorneys require that the fees they charge not be unconscionable. See Cal. Rules of Prof. Conduct 4-200 What is unconscionable is determined on a case by case basis. But if your attorney only worked on your case for 5 hours and got a settlement for $500,000 and is trying to take a third–that would be unconscionable. The hourly rate equivalent would be around $33,000/hour which is beyond absurd.

If your case resolves quickly for a high recovery your attorney should be open to reducing their contingent fee percentage so the fee is not unconscionable. Just ask, and point them to the ethics rule cited above.

What about cases where you can get attorney’s fees awarded?

So, some statutes allow for the recovery of attorney’s fees if the claimant (you) is victorious in their case. For example, the federal Whistleblower Protection Act, provides for the award of both reasonable attorney’s fees and costs if you win your case before the Merit Systems Protection Board. See 5 U.S.C. 1221(g)(2).

What this means is that your attorney can attempt to recover their actual time (hours expended) at their hourly rate. So, for example, if they spent 100 hours on your case and their typical hourly rate is $400 they will seek $40,000 in attorney’s fees.

Can I (the client) keep some or all of the awarded attorney’s fees?

Typically, no. If a statute allows for attorney’s fees, any fee agreement you enter into will likely stipulate that the attorney’s fee award will go to the attorney. Moreover, there are ethical rules that prevent attorney’s from sharing legal fees with non-attorneys. See Cal. Rules of Prof. Conduct 1-320. As to the disbursement of other awards along with attorney’s fees, that is up to you and your attorney. Since contingent fee cases are risky and could easily result in no payment for the attorney, in some instances, the attorney may require that they get part of any recovery you get along with attorney’s fees to compensate them for the risk in expending all that time on your case.

Why won’t an attorney take my case on contingent fee?

If you have visited multiple attorneys and they have all declined to take your case on a pure contingent fee basis, it may be because you do not have a strong case, or that the statute under which you have a cause of action limits your potential recovery. Or, it could be for a host of other factors.

A simple illustration of the financial calculus that goes on when evaluating a contingent fee case is as follows. If an attorney knows the most you can recover is capped at $10,000 and they will easily spend $20,000 of their time on a case–that’s a losing proposition for them and you, so they won’t take your case. Again, there are many factors that go into the decision of whether or not to represent an individual, some of which have nothing to do with you, or your case, such as their current workload or familiarity with the specific area of law your case relates to.

What is a hybrid fee arrangement?

A subject that warrants an article all its own, hybrid fee arrangements are fees where the attorney and client agree to both a contingent fee and some other fee such as a flat rate or fixed fee. One potential arrangement is where a client agrees to pay the attorney a flat fee for taking their case, but in an amount much smaller than the attorney would get if they billed the case hourly. In return, the client also agrees the attorney will get a percentage of any recovery should they win the case. This arrangement can be very beneficial to both parties because it assures the attorney they will get minimal compensation for their work while still providing an incentive to win the client’s case. It is beneficial to the client because that upfront flat fee may get an attorney to take their case when they wouldn’t have if the case was purely based on a contingent fee. I have moved to using hybrid fees fairly often. I find these types of agreements can be negotiated to a point where they benefit both parties.

Wrapping up: Five things to remember about fee agreements

  1. Fees are negotiable, discuss and work out the details.
  2. Think about the possible scenarios that could occur, even the remote ones, when you are negotiating a fee agreement.
  3. People respond to incentives, contingent fees align the parties’ interests. Aligned interests are a good thing.
  4. Paying a big contingent fee to your attorney is actually a good thing, it means you won a big award and your attorney did a good job.
  5. Contingent fees help people get representation when the otherwise wouldn’t. Just because you do not have money, doesn’t make it legal to discriminate against you, wrongly terminate you, or deny you a reasonable accommodation.

I hope you found this information about employment-law fee agreements helpful.

 

Related posts: