Imagine you are an employer and were just served a complaint by an ex-employee under the Family Medical Leave Act (“FMLA”). You review your HR files, his prior emails and interview his co-workers and discover, after the fact, this same ex-employee engaged in various form of employee misconduct that, that had you known about this misconduct, would have led him to being fired anyway. You contact employment law counsel and now want to utilize these facts to mount an “everything including the kitchen sink” defense to challenge his FMLA claim. Your employment law counsel confirms that this “after-acquired evidence” may mitigate some of the employee’s FMLA claims. He warns, due to FMLA fee-shifting of attorneys’ fees you may pay to the employee, doing so may increase your total financial liability. You tell your employment lawyer to proceed full steam ahead.
Cuff v. Trans States Holding, is a cautionary 7th Circuit case that all business owners should keep in mind in “moving full steam” ahead on their defenses in a FMLA litigation. In Cuff, the ex-employee was awarded $42,000 in compensatory damages but also awarded $325,000 in attorneys’ fees, or seven times the amount of the damages award. Whether under FMLA, Title VII, ADA or FLSA, generally it is employee’s attorneys’ fees that an employer is forced to pay that become the largest source of damages to the employer.
The employer in Cuff discovered after replacing plaintiff/employee that he had engaged in sexual misconduct with a subordinate, been arrested for a DWI, and was taking narcotics for his medical condition so often that he was unfit for work. Despite having these seemingly beneficial facts, the employer’s counsel did not take the correct steps in presenting this evidence at trial through a proper “offer of proof”. Yet, the plaintiff’s/employee’s counsel, before trial, was forced to investigate the employer’s above facts, including responding to discovery requests, and prepare for trial addressing these employer-originated facts. The Cuff court concluded employer’s tactics as being “hyper-aggressive”, the employee/plaintiff’s counsel was justified in incurring legal fees to investigate and respond to employer’s claims, and that employer’s pursuit of these above facts/claims drove up the plaintiffs’ legal costs “without justification”.
The Cuff judge held that it is not unreasonable for attorney’s fees to exceed recovered damages, even by a significant margin. The Seventh Circuit admonished the employer and his counsel for how they conducted their “blunderbuss” defense and ultimately presented them with a substantial financial bill for their over-aggressive litigation tactics.
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