Company Ordered To Pay Worker’s $700,000 Attorney Bill

United Parcel Service, Inc. (UPS) essentially “won” an age discrimination case  when a California jury awarded an ex-employee only $27,280 in damages.  That relative victory was short-lived, erased by the trial judge awarding the worker $700,000 for her attorney fees.  The appeals court recently upheld this decision.  Muniz v. United Parcel Service, Inc. (9th Cir. 2013) 738 F.3d 214.

Kim Muniz sued employer UPS alleging, in part, that supervisor Ron Meyer demoted her based on gender and age discrimination and retaliation in violation of California’s Fair Employment and Housing Act (FEHA), California Government Code 12900 and following sections.   UPS argued it had promoted Muniz beyond her level of competence and Meyer was simply the first to recognize Muniz’s failings.

The jury found Muniz’s gender wrongfully motivated UPS to demote her and was a substantial factor in causing her harm. However, while Muniz requested damages totaling over $700,000, the jury only awarded her $27,280 — $9,990 for lost earnings, $7,300 for past medical expenses and $9,990 for past non-economic losses.

Both sides claimed victory and sought payment from the other for attorney fees under FEHA, Government Code section 12965(b).   The court found Muniz the prevailing party, at which point she requested $2,000,000 in attorneys’ fees (some 73 times the damages award).  The district court judge then awarded her some $700,000, or 26 times the jury’s damage award.

UPS appealed the $700,000 assessment, claiming Muniz didn’t deserve that much after her very limited success at trial.  However, the appeals court was unsympathetic, ruling that “a trial court does not under California law abuse its discretion simply by awarding fees in an amount higher, even very much higher, than the damage awarded, where successful litigation causes conduct which the FEHA was enacted to deter [to be] exposed and corrected.’”

This case underscores that employers must consider the possibility of attorney fee awards to prevailing employees in FEHA discrimination cases even if the worker’s claims appear to be relatively weak.  Of course, to reduce the potential for employee claims as much as possible, employers should take effective measures to prevent unlawful workplace conduct.  Employers should also always promptly and thoroughly investigate all complaints of discrimination, harassment or retaliation and take effective remedial action as necessary.  Company managers must always act as part of the solution to any such claim and, whether out of neglect or other ill-advised reaction, never place themselves in a position where they can be perceived as part of the problem.

For more information or assistance, please contact the Law Offices of Timothy Bowles, 626-583-6600 or visit our website at Law Offices of Timothy Bowles.