In discrimination cases, when a plaintiff (which is a fancy legal term for employee) wins he or she is often entitled to have the defendant (typically the employer) pay his or her attorneys’ fees.  There are lots of cases out there that discuss formulas for such fees .

But the basic assumption that some employers will make is that these fees will not amount to a significant number.

A new case out of New York (the same federal Circuit as Connecticut) should change that perception. I would expect this case to become the new “gold standard” (pun partially intended) for fee requests both in New York and in Connecticut for employment law cases.

The New York Law Journal (subscription required) reports that in one case, the prominent plaintiffs’ firm of Outten & Golden received over $1 million in fees following a settlement of a discrimination claim.

What is particular noteworthy is that the Court ultimately granted an hourly fee request of lead partner Kathleen Peratis for $600 per hour (down from her requested rate of $675).  Since 2001, Peratis has headed the sexual harassment group at Outten & Golden, which the magistrate judge said “enjoys a reputation as one of the outstanding firms representing plaintiffs in employment cases.”

Why should employers in Connecticut be interested in this? Because this case is likely to be Exhibit A by any plaintiff’s attorney as to the “going rate” that experienced plaintiff’s attorneys are charging for their services.  The argument will likely be “Well, your honor, if a NY attorney can get $600/hour, my proposed Connecticut rate of $525 is surely reasonable” (never mind the fact that there are few employment law attorneys in Connecticut who charge that rate in “real” life.) 

But, you say, this is a New York firm, not Connecticut, so why should I worry?  However, you would be wrong to make that assumption.   Outten & Golden has a sizable office in Stamford, Connecticut and represents many employees across the state.  (Full disclosure: I have crossed paths with some of their attorneys many times and worked collaboratively with several on bar association projects.)   Thus, it is very much a Connecticut issue.

Are attorneys’ really worth that much? That’s hard for me to judge, but the rate does seem excessive for Connecticut — even the lower Fairfield County area.  Will courts in Connecticut use this case to raise awards in Connecticut? That remains to be seen.

For employers, the case has two important takeaways:

• First, don’t underestimate claims for attorneys fees in employment cases. Settlement of cases early on can help prevent a situation where an attorneys’ fee interferes with a way to settle cases.  And for valuing cases at trial, don’t just consider “back pay” loses, but consider that the attorney could receive a sizable award in response to a fee request.
• Second, re-familiarize yourself with the Second Circuit’s decision in Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, 522 F. 3d 182 (2d Cir. 2008). In Arbor Hill, the 2nd Circuit set forth new rules for district judges to follow when determining attorneys fees. The court there suggested that judges use their “considerable discretion, to bear in mind all of the case-specific variables that we and other courts have identified as relevant to the reasonableness of attorney’s fees in setting a reasonable hourly rate.”