On January 19, 2016, the Women’s Equality Act became law in New York. In an earlier blog, I wrote about the key provisions of the Women’s Equality Act, and how this new act greatly broadens the protection to women in matters such as sexual harassment and pregnancy discrimination.
In a nutshell, these laws strengthen New York’s equal pay statute, expand protection for victims of sexual harassment, require your employer to be flexible when you’re pregnant and need support, provide for the recovery of attorneys’ fees in sex-based employment discrimination cases, and prohibit discrimination based on your family status.
Here, I want to talk about a key aspect of the law that may be overlooked – the potential that attorney’s fees could be awarded in sex discrimination cases, and why this matters if you’ve been the subject of sex discrimination.
The Impact of Attorney’s Fees in Sex Discrimination Cases
Prior to the adoption of the New York Women’s Equality Act of 2016, New York State law did not provide for an award of attorneys’ fees to a female employee who won her case in any kind of employment discrimination claim. Now, the revised statute provides for an award of reasonable attorneys’ fees for successful sex discrimination claims.
When a company discriminates against an employee based on her sex and she files a lawsuit, not only must the company face the prospect of losing the case and paying economic damages to the Plaintiff, but the company must face the possibility that their financial exposure could be greatly increased. Let’s take a look how this works.
Suppose attorneys normally collect a one-third contingency fee, and a jury awards a sexual discrimination victim $300,000 at trial. Prior to the Act, the victim (the plaintiff) would receive $200,000, and the attorney would receive $100,000.
Now, under the Act, the judge might enter a verdict against the defendant company for $300,000 for damages, plus an additional $100,000 for the victim’s legal counsel. So, the plaintiff/victim might keep $300,000, and the attorney would receive $100,000. The defendant company would have to pay $400,000 (plus, of course, the fees of their own legal defense counsel).
As a result of the Act, the “settlement value” of sexual discrimination cases has increased. In analyzing whether it should settle, a defendant company now must not only take into account losing at court and the damages that may be assessed against it at trial, but also the possibility that attorneys’ fees that may be awarded against it. In the above example, the risk to a company will have increased from $300,000 to $400,000, making a higher settlement likely.
What Amount of Legal Fees May be Awarded?
This aspect is not clear, as the statute only discusses an award of reasonable attorneys’ fees. Suppose at trial the sex discrimination victim is only awarded $25,000, but the attorney has spent 400 hours representing the client. Assume also that attorneys might charge $350 hour. The attorney will then have a theoretical investment of $140,000 worth of time in the case. Will the court award the attorney this much in fees? Or perhaps $75,000 in fees?
This aspect is not yet clear. The uncertainty, however, may provide sex discrimination employers with a strong incentive to settle, as a $25,000 case could top $100,000 when attorneys’ fees are considered, so the Plaintiff’s settlement leverage and power is substantially increased.
How the Victims of Sexual Abuse Benefit
The new Act puts increased pressure on companies because a company knows that if they may have to pay your lawyer’s fees after you win in court, your case is going to cost them a lot more than before the Act. As a result, they will have an increased incentive to settle with you rather than face the risk of paying your legal fees after you prove your case in court. Importantly, if your company is ordered to pay your legal fees, that puts more money into your pocket for the sexual harassment, abuse, and suffering you endured.
If you are being sexually harassed or subjected to wrongful and illegal discrimination at work, please call our firm to learn how we can help.