Should Employers Sue to Recover Attorney’s Fees After Winning a Lawsuit?

shutterstock_146730020Unfortunately, the usual answer is no.

After being sued by an employee for discrimination without a scintilla of evidence to support the claim, clients often ask “Can we countersue the employee for attorney’s fees?” The majority of the time, the answer is “No.” That said, Title VII of the Civil Rights Act of 1964 does permit the prevailing party to seek attorney’s fees. A prevailing party can be either the plaintiff or the defendant.

However, a recent United States District Court decision highlights exactly why even when attorney’s fees may be available, it is often not worth the time, aggravation and expense in pursuing them against a former employee. In Moch v. Town of Greenwich, Docket No. 3:11cv1398 (D. Conn. 2014), even though the Town was the prevailing party in the litigation, U.S. District Court Judge Stefan Underhill ruled against the Town in its claim for attorney’s fees against a former employee after the employee lost her Title VII claim.

Moch sued the Town alleging that she was subjected to discrimination and a hostile work environment based on her gender and Polish origin. She alleged that the Town took various discriminatory actions against her based on her protected classes. The Town responded that it had issued reprimands and suspensions because the employee had used municipal resources to conduct non-Town work and because she had unexcused absences and tardiness.

The Town prevailed on the plaintiff’s Title VII claim, but the Court refused to award its legal fees. The Court found that the plaintiff proved that the work environment was unfriendly and tense and even though her claim was weak, she had suffered adverse employment actions – just not discriminatory actions. Although the employee could not prove discrimination, the court found that her claims were not frivolous, meaning that there was at least a “scintilla” of evidence to support them. The Court, therefore, refused to award the Town its legal fees, but did award the Town its costs in the amount of $1,223.

This case demonstrates that courts are loath to award attorney’s fees to employers in cases even when a plaintiff has a terribly weak claim, and little or no evidence of discrimination. It is therefore rarely worth the fees and costs involved in pursuing such claims for attorney’s fees.

There is another reason why such claims are usually folly. It is often the case that even if an employer wins a judgment for its legal fees, the judgment may be uncollectible or the employee could declare bankruptcy to make the judgment uncollectible.