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Did everything employee asked and still got sued? You may get attorneys’ fees

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in Discrimination and Harassment,Human Resources

If an employee sues you for discrimination despite your successful efforts to resolve her complaint, you may be able to recover your attorneys’ fees from the plaintiff. The reason: That’s a frivolous lawsuit.

Recent case: Alice Michael sued Robert Wood Johnson University Hospital after working there for more than 20 years. She claimed that she had not been fully reimbursed for classes she took under the hospital’s tuition reimbursement plan.

The hospital had reimbursed Michael for more than 30 courses over her part-time career. At issue were two additional courses for which the hospital had originally denied reimbursement. With a lawsuit looming, she asked again and the hospital paid the bills. But then Michael sued anyway.

The trial court dismissed her age discrimination and hostile work environment claims under the New Jersey Law Against Discrimination (LAD). It also ordered Michael to pay the hospital’s attorneys’ fees as a penalty for filing a frivolous lawsuit. She appealed.

The Appellate Division of the Superior Court of New Jersey modified the lower court’s order, but upheld the principle that filing a frivolous LAD lawsuit can be punished. It said that the lower court must determine:

  1. Whether a lawsuit was brought in “bad faith”
  2. What a reasonable attorneys’ fee award would be
  3. Whether the employee had the ability to pay the fees
  4. Whether the employee’s attorney urged the lawsuit or the employee herself did.

In other words, the court didn’t want to completely discourage lawsuits, even if the claim may be tenuous. Nor did it want to give free rein to meritless litigation brought to annoy (or bankrupt) employers. (Michael v. Robert Wood Johnson University Hospital, No. A-0414-06-T2, Superior Court of New Jersey, Appellate Division, 2008)

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