Employers Need Not Pay Legal Fees to Discrimination Employees who Don’t Win Damages

Employers facing discrimination lawsuits got a bit of help from the Massachusetts Court of Appeals recently when it held that employees cannot force them to repay their legal fees unless they do more than win their cases at trial. In a somewhat surprising decision, the Court concluded that proving discrimination is not enough. The law, they held, also requires employees to win some sort of tangible damage award as a result of the discrimination.

Damages sufficient to require a legal fee award can come in two types – measurable, such as lost wages, and non-measurable, such as a promotion order. “[T]he important distinction is between ‘actual but not clearly measurable damages or loss, contrasted with no actual damage or loss,’” the court conclude in Kiely v. Teradyne, Inc. “Actual but not clearly measurable damages or loss, like injunctive relief, would entitle a party to attorney’s fees. By contrast, an absence of actual damages or loss would not.”

The case involved a challenge to a superior court’s judge’s decision to both vacate a punitive damages jury award and deny a winning plaintiff’s legal fee request. The former employee won her retaliation case but did not receive financial damages or equitable relief. The jury did, however, award her $1.1 million in punitive damages, a type intended to punish employers for outrageous conduct. The anti-discrimination statute, Chapter 151B, generally requires losing employers to repay the legal fees of winning employees at the Massachusetts Commission Against Discrimination or in state court lawsuits. Fee awards against employers often reach $100,000 or more.