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You are about to go to trial on a former employee’s discrimination claim that she was terminated because of her gender. With counsel, you have engaged in a cost-benefit analysis, considering how much back-pay she could get if she won, along with possible emotional distress damages. The total is high, but you have decided to go to trial because you did nothing wrong, and, moreover, because her settlement demands are out-of-line in light of the potential loss. However, in conducting this cost-benefit analysis, the employer must also consider a potentially large and often overlooked source of exposure: the plaintiff’s attorney’s fees. In two recent cases, Bridges v. Eastman Kodak Co. and Pino v. Locascio, the Second Circuit Court of Appeals, which governs actions in the Connecticut federal courts, reaffirmed the rule that a “prevailing plaintiff” in a discrimination lawsuit may recover her attorney’s fees. As the Court explained in the Bridges case, a plaintiff prevails if she “succeeds on any significant issue in litigation which achieves some of the benefit [she] sought in bringing suit.” She does not have to win on all of her claims or be awarded all of the damages she claimed in order to “prevail” and be entitled to recover her attorney’s fees.

Once the court has decided that the plaintiff prevailed, it must decide how much of her attorney’s fees to award. The award must be reasonable. The most important factor in determining reasonableness is the degree of the plaintiff’s success. Thus, in the Pino case, the Court found that the plaintiff had been discriminated against, but granted no attorneys fees because plaintiff had asked for $21,000,000 in damages and had been awarded only $1. The Court made a point of saying, however, that even where a plaintiff recovers only $1, it is still possible, at least in theory, that she could be entitled to receive her attorney’s fees if she is otherwise a prevailing party.

There is no rule that attorney’s fees must be less than the amount recovered, or even be near it. In the Bridges case, there were three plaintiffs, all of whom proved they had been discriminated against. After the trial, one plaintiff was awarded $20,000 in damages, a second was awarded approximately $37,000 and the third was awarded approximately $60,000. The plaintiffs then asked for their attorney’s fees and the court awarded them more than $750,000, a figure reduced from the nearly $1,200,000 the plaintiffs had requested. The defendant thus had to pay more than six times as much in attorney’s fees than it paid in actual damages.

While attorney billing rates typically are far higher in New York where this case took place than in Connecticut, these figures still should give employers pause. While fighting a claim all the way through trial is sometimes the right thing to do, the employer must be aware that its exposure includes the plaintiff’s attorney’s fees, and must try to estimate as accurately as possible what those fees are likely to be.