Employee Rights and Hourly Fees Do Not Mix

This past Friday I spoke with a potential client who was recently terminated by his employer.  I concluded that he did not have a case worth pursuing and any claims he did have were likely not worth pursuing if it meant giving up the severance his employer had already offered to him.

At the end of the consultation he said he was surprised at my response because he had spoken to another employee-rights firm in Southern California where they told him that he had a "great" case and wanted to pursue it for him.  While I know I may not always be right about the merits of a case, in this situation I was very confident in telling him that based on what he was telling me his case was definitely not "great" and likely non-existent.

I was suspicious about the situation, so I asked him about the other attorney he had seen and what sort of fee arrangement he was offered.  The firm had actually offered to represent him in exchange for (1) a large retainer fee (likely around $1-2,000) AND (2) an hourly fee agreement.  Of all the employee-rights attorneys I know in the California, this is the first firm I have seen that charges hourly fees.  Most other firms work on a contingency fee where the client pays nothing unless they recover damages on the client's behalf.

This area of the law is unique in that almost all of our clients are people who recently became unemployed and wonder if they will be able to pay their mortgage and keep their house, much less substantial attorney's fees.  We work almost entirely on contingency, although we do represent a few hourly clients, but usually just to review employment, severance and non-compete agreements.

Because attorneys in California generally charge $350-500 per hour, contingency fees are usually the only way a client can pursue these types of claims.  Fees add up very quickly and in an hourly billing arrangement clients can end up owing their attorney tens-of-thousands of dollars even if they lose.  This also creates a conflict of interest where it is actually in the attorney's best interest financially to drag a case out, perform unnecessary work and bill more hours.  Debates over these issues are raging in the legal community, such as in the article The Billable Hour Must Die published last year in the American Bar Association Journal.

The bottom line is that if you speak to an employee-rights attorney and they offer to take your case either (1) on an hourly basis or (2) on a contingency fee but also with a large up-front retainer fee, you should be wary.  At the very least you should get a second opinion from another firm and ask how they would charge to represent you.  Our firm, as well as others in California offer free consultations that can be done over the phone.

The Perils of Trying to Win at "All Costs"

Some employees (and some employee-rights attorneys) believe that if they are wrongfully terminated and able to get a new job just days later, they will only be able to recover a few thousand dollars and it would not be "worth it" to pursue a claim, especially if they have to pay an attorney to get it. However, in California victims of employee rights violations can recover their own attorney's fees in most cases, which alone could make pursuing a claim worth the effort for both the client and the lawyer.

A good example of this is Harman v. San Francisco (2007) 158 Cal.App.4th 407.  In that case, the jury ruled that the defendant had a policy of "reverse" discrimination against white males, but only awarded the employee $30,300 in compensatory damages, including lost wages, etc.  However, the court also awarded Mr. Harman over $1 million in attorney's fees.

The case lasted almost eight years between the trial and appeals, but in the end the employee prevailed.  When a client wins and is entitled to attorney's fees, the court evaluates how much time the attorney spent on the case and sets an hourly rate comparable to similar attorneys in the community.  Unless the attorney performed substantial, time-consuming tasks for the case which were clearly unnecessary, all of the time will be reimbursed by the defendant.

Although several management-side employment attorneys were outraged by this decision, the employee (and his attorney) should not be penalized for spending the necessary time on the case to win.  While our firm does a great deal of litigation and we do not mind "fighting", we start almost every case with a good-faith attempt at exploring informal settlement options with the defendant employer.  Both sides should want to do this for the simple fact that once attorney's fees start accumulating, both sides become more adversarial and "invested," so they feel they have to "win".

Most savvy employment defense counsel are aware that where a claim appears to be valid, it is very much in their client's best interest to at least try and resolve the case quickly.  This case is a prime example of a situation where the defendant likely could have settled for a fraction of what they ended up paying, yet they instead chose to "fight" and paid the price.

I am not suggesting that employees (or attorneys) should pursue (or refuse to settle) cases solely to rack up substantial attorney's fees, but if a case has merit the employee should not have to wonder if their lawyer's bill will be more than what they actually recover in the case, which is the case is many other parts of the country.

Family Status Discrimination and Equal Pay Laws

This post is part of our ongoing series dealing with "family status" discrimination.  Family status claims implicate several employment laws, depending on the facts of a given case.  For example, the federal Equal Pay Act ("EPA") and also California law mandate "equal pay" between men and women.

The fact that women disproportionately care for children in the United States is likely a direct contributor to the fact that women still tend to make less money for doing the same work, despite the EPA and other laws.  This is because such discrimination is often subtle.

For example, a woman might take time off to care for children and when she returns to work make less money than her male counterparts because they have more "seniority".  While this might be legitimate, "seniority" is sometimes used as a synonym for "loyalty" or "dependability" in reference to the possibility of the woman leaving again to have another child or as punishment for leaving before.

Additionally, mothers who remain in the workforce after having children often start working part-time hours and the other employees often receive a higher rate of pay for "full-time" work.  Reducing a part-time worker's salary is not per se illegal, but there are certainly pitfalls.  For example, if mothers who switch to part-time have their salary reduced, then it still must be comparable to part-time male workers.  Also, if a woman cuts her hours by 50% and her pay is reduced by 70%, then it can be argued she is being "penalized" for working less.

While not always illegal, an employer would likely have to prove that this is the same rate ALL part-time workers have their wages reduced by and/or that there is a legitimate business reason for doing so.

"Assumption" Stereotyping as Family Status Discrimination

This is our third post in our series on "family status" discrimination. The last post dealt with examples of "moral stereotyping" where an employer's belief on what women should do motivates their discrimination. This post deals with what I call "assumption" stereotyping, which deals with instances where an employer is motivated by their beliefs about what women will do, given their family status.

In these situations, the employer's concerns about how an employee or job applicant's home life could affect their job performance are often valid in theory, but not in application. In cases such as these the employer only assumes that the employee will not be willing or able to do the job and has no reason (other than stereotypical views of women) to make their assumptions.

One common example is where an applicant is not hired because the employer assumes she will not be willing or able to work the long hours the job requires because of her (assumed) duties at home. However, it is quite possible that the husband/father or another family member has taken on some of the childcare duties to allow her to work more. Because this decision relies on the employer's stereotypical assumptions about women, this could constitute illegal discrimination.

It is true that it might be valid in certain cases not to hire an employee because she cannot perform the job due to family responsibilities, but the employer would have to have some actual proof on which to base their decision. For example, if during the interview the employer mentioned the job would require her to work no less than 80 hours per week and the applicant responded that she could not possibly work more than 40 hours with two kids at home, then this could be a valid reason not to hire her.

One oft-cited case of this type is Trezza v. Hartford, Inc., 1998 WL 912101 (S.D.N.Y.). In that case, an attorney was not even considered for a promotion because it would have required extensive travel. Her employers simply assumed that she would not be interested in the position because of her family and promoted a less-qualified man instead.

The employee was also told that once her husband made enough money she would be "sitting at home eating bon bons" and the company's vice president commented on the "incompetence and laziness of working mothers".

Table of Contents for This Series

  1. Family Status Discrimination Series
  2. "Moral" Stereotyping as Family Status Discrimination
  3. "Assumption" Stereotyping as Family Status Discrimination
  4. Family Status Discrimination and Equal Pay Laws

"Moral" Stereotyping as Family Status Discrimination

This is my second post in our multi-part series on "family status" discrimination, which is becoming more and more common under both federal and state law.

There are many ways family status discrimination can happen in the workplace, some of which are very subtle and difficult to prove. Other types are not subtle at all, such as the topic of today's post, which is what I call "Moral Stereotyping".

Moral Stereotyping Defined

Generally in family status discrimination claims the employer is largely concerned about how the employee's caregiver responsibilities affect them, such as increased absences, less dedication to the job, less focus, unreliability, etc. However. one of the unique aspects of moral stereotyping is that the employer is often more concerned about the well-being of the employee, her child her family or other paternalistic rationale.

Yes, it is true that even in 2008 there are many employers out there who still believe a woman "belongs" at home and that their primary duty is to raise children even to take care of their husband. In these situations, employers might even terminate an employee (to their own detriment) in an effort to force the employee to do what they believe is "right".

Some commonly-cited motivations based on this theory are discussed below.

"Women Belong at Home"

The notion that a woman simply "belongs at home" is the most common way in which these issues are expressed by management. This is a prime example of the sorts of gender stereotypes that foster discrimination against these employees.

The motivation here is not necessarily what is best for the employee or her child, but instead what the employer thinks she "should" do based on traditional gender roles. These employers think that even if the wife makes twice as much as her husband, she should quit her job to raise the children.

A more poignant way of expressing this can be found in Knussman v. Maryland, 272 F.3d 625 (4th Cir. 2001), where the employee was simply told "God made women to have babies". Speaking of God, several employers do cite their religious views as a basis for this discrimination, which exposes the employer to an additional claim for religious discrimination.

"Children Need Their Mothers"

The traditional notion that children must spend as much time as possible with their mothers is certainly ingrained in our society. This category of cases usually involves an employer who believes they know what is best for the child and believes they are acting in the child's best interest when they terminate or failure to hire the employee.

For example, in Moore v. Alabama State University, 980 F.Supp. 426 (MD Ala 1997), the employee's supervisor told her he believed women should stay at home with their family and denied her a promotion because the new job would involve too much travel for a "married mother", despite the fact that she applied for the job and had already worked out a plan with her husband to accommodate the travel.

Moral stereotyping is not limited to male management employees. Often these issues can come into play when an employee's female supervisor either has grown children or grandchildren and holds strong views on these issues they are not afraid to make known.

A variation on this theme is where an employee's supervisor expresses their belief that placing a child in day care is harmful to their development.

Men are the Breadwinners

Gender stereotypes are also commonly used against men. It is no longer unusual for a husband to drop down to part-time when a child is born while his wife, who might make more money than he does, continues to work full-time.

In certain testosterone-fueled workplaces, this can lead to harassment of "Mr. Mom" by co-workers or he might simply be denied the opportunity to work part-time, even though females are allowed to do so.

This type of claim is rapidly becoming more common as working mothers continue to enter the workplace and men volunteer to help with caregiver duties.

"Reverse" Caregiver Discrimination

Occasionally I come across a case where an employee has suffered "reverse" caregiver discrimination.

For example, if a layoff occurs in a company and a supervisor decides to terminate an above-average, single male employee and instead keep the below-average, married father of two.

In California, this more of an example of "marital status" discrimination, which is specifically prohibited under California law, but these facts could also constitute family status discrimination.

I use this example here because the supervisor is simply applying his own stereotypes and morals to "protect" the man with a family based on his own morals and values instead of what is "fair" to the better-performing employee or what is in the company's best interest.

Bringing Moral Stereotyping Cases

Moral stereotyping cases tend to be the most lucrative and easiest to prove among the various types of caregiver discrimination for a number of reasons.

First, they often involve the most inflammatory evidence that is offensive to the highest number of potential jurors. If a supervisor testifies to his belief that "God made women to have babies" and that this belief was why he did not hire the plaintiff, you can bet that many on the jury may be quite hostile towards the company when awarding the plaintiff damages.

Second, the supervisor who takes the wrongful actions against a plaintiff in such as case is often quite vocal about their motivations when they terminate or refuse to hire because (1) they truly believe they are doing the "right" thing, (2) they want the employee to know that this is the "right" thing and (3) it never crosses their mind that they are handing the employee a substantial lawsuit by "lecturing" them.

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