Updated on September 6th, 2023

How Much Does It Cost To Defend an Employment Lawsuit?

It costs employers an average of $75,000 to defend a lawsuit and settle the claim. If the case does not settle, defending the employment lawsuit before trial costs upwards of $125,000.

By Brad Nakase, Attorney

Email  |  Call (888) 600-8654

Defending an employment lawsuit is very costly. Defending an employment lawsuit up to discovery and a motion for summary judgment can cost up to $75,000 for an employer. An employer may expect to spend up to $245,000 to take the case to trial. After trial, if the employee prevails, an employer is also responsible for the employee’s attorney’s fee of up to $250,000; the employer is also liable for the employee’s damages – whatever it may be. Most employers will settle the former’s claim instead of risking $250,000 to $500,000.

As a California employment attorney, I’ve defended hundreds of employers since 2006. My goal is to be mindful of my business clients’ bottom line, minimizing attorney’s fees and aggressively defending the employment lawsuit.

Who pays for the employee’s attorney fees?

The cost of mounting a defense against an employment lawsuit is considerable. Covering the expenses of defending such a lawsuit up until the discovery phase and the filing of a motion for summary judgment can reach up to $75,000 for an employer. To bring the case to a trial, an employer should anticipate potential costs of up to $245,000. Following the trial, in the event that the employee prevails, the employer becomes accountable for the employee’s attorney’s fees, which could amount to as much as $250,000. Additionally, the employer bears the responsibility for compensating the employee for any damages awarded—irrespective of the sum. Given the substantial financial risks involved, a majority of employers opt to settle the claim rather than expose themselves to the possibility of facing expenses ranging from $250,000 to $500,000.

With my experience as a California employment attorney stretching back to 2006, I have successfully defended hundreds of employers. My primary aim revolves around being mindful of my business clients’ financial interests, thus working to minimize attorney’s fees while vigorously advocating for a robust defense in employment lawsuits.

What does the labor code say about attorney fees?

As outlined in California Labor Code 218.5, employees who emerge victorious in employment lawsuits are entitled to recover their attorney fees. Conversely, an employer that successfully defends against an employment lawsuit may be eligible to recover attorney fees if the court determines that the employment lawsuit was initiated in bad faith.

According to California Labor Code 218.5(a): “In cases where legal action is initiated to address unpaid wages, fringe benefits, or contributions related to health and welfare or pension funds, the court shall grant reasonable attorney’s fees and expenses to the prevailing party if any party involved in the case requests such compensation upon commencing the legal action. Nonetheless, if the prevailing party in the court proceeding is not an employee, attorney’s fees and costs will only be awarded in accordance with this section if the court concludes that the employee brought the legal action with malicious intent. This provision does not apply to legal actions initiated by the Labor Commissioner.”

How to protect your business from employee lawsuits

California puts a strong emphasis on safeguarding employee rights. In the year 2022 alone, a notable total of 73,485 complaints were lodged with the EEOC by employees. It is imperative to establish protective measures to shield your business from potentially opportunistic legal claims. Paradoxically, the more prosperous your business becomes, the greater the likelihood of attracting lawsuits.

Even in situations where you have committed no wrongdoing and substantial evidence attests to your innocence, it often proves advantageous to opt for settlement rather than incurring escalating legal expenses. Settling a case and paying $10,000, for instance, yields a far more favorable outcome than facing potential costs of up to $100,000 in the event of a loss. These costs encompass the settlement amount, legal fees, and the legal fees of your employee.

Stringent company policies are pivotal in minimizing legitimate instances of discrimination. Similarly, having a well-defined policy for employee termination and considering the option of offering a substantial severance package in exchange for the release of legal claims can be advantageous.

Engaging a proficient employment attorney is among the most crucial steps in fortifying your business against employment-related lawsuits. They will assist you in crafting comprehensive employee handbooks, policies, and documents, thereby reducing the chances of inadvertently violating employment laws and consequently decreasing the risk of litigation. Your attorney will also provide guidance in situations that could potentially evolve into lawsuits or when an employee issues a lawsuit threat.

Brad Nakase, an accomplished employment attorney, is adept at handling both sides of employment lawsuits, making him well-equipped to advocate for your business. Possessing an in-depth understanding of federal and California employment law, we are committed to fortifying your business against legal challenges. Our impressive track record demonstrates our success in mitigating the risk of lawsuits for companies. However, should your business become entangled in a lawsuit, we are resolute in our determination to aggressively litigate and secure a favorable outcome.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment Law

Most recent blogs:

How to call in sick to work?

When calling in sick to work, be direct and concise, stating your inability to come in due to illness. Inform your supervisor or HR the nature of your illness and when you expect to return.

Equal Pay Act: What is it?

The Equal Pay Act an employers from paying their workers less than employees of the opposite sex for similar or identical work.

Exotic Dancer License & Stripper License

It is unlawful to work as an adult entertainer without a stripper license, called a "adult entertainment permit. Therefore, knowing how to get your stripping license is necessary to work in a adult club.

Strippers Minimum Wage in California

Strippers in California must earn a minimum wage of $15.50 per hour or higher, depending on the city's minimum wage where they work.

What Is A Hostile Work Environment?

The law defines an unlawful hostile work environment to mean when a superior or coworker communication or behavior that is offensive, intimating, or discriminate on the basis of gender, religion, race, ethnicity, etc.

Can you take unpaid time off in California?

There is no legal requirement in California that an employer provide its employees with either paid or unpaid vacation time. However, the federal Family and Medical Leave Act (FMLA) gives eligible employees the right to take up to 12 weeks of unpaid leave per year.

DFEH Right to Sue

To file a lawsuit for discrimination, you must file a complaint with DFEH and obtain a Right-to-Sue notice.

Is It Illegal To Not Pay Overtime?

Yes, it is illegal for employer to not pay overtime because California law requires that employers pay overtime, whether authorized or not.

What Is Rate Pay Meaning?

The meaning of pay rate is the average hourly rate an employee is paid calculated by dividing the total pay for employment in a work week by the total number of hours actually worked.

California Break Laws

Under California law, non-exempt workers are entitled to two paid 10-minute rest breaks and one unpaid meal break during their eight-hour shift. 

Not Getting Paid for Work I Have Done

Workers who have not been paid for work have the right to file a claim with the federal and state Department of Labor for unpaid wages.

California Overtime Law

Under California overtime law, an employee who works over eight hours a day or over forty hours per week is entitled to overtime pay at one and one-half times the regular rate of pay.

Who is exempt from overtime pay?

As of 2023, to be exempt from overtime pay, any employees who are paid at least $62,400 per year and work are primarily professional, executive, creative, managerial, or intellectual and require the exercise of independent judgment.

Can Previous Employers Talk Bad About You?

There are no state or federal laws prohibiting what a previous employer can or cannot say about a former employee. However, previous employers are not permitted to make up lies to damage your reputation and make it difficult for you to get another job.

Can An Employer Cut Your Pay as Punishment?

Employers cannot cut hours to retaliate against employees. Cutting the hours of an employee should never be used as discipline or in an attempt to make an employee quit. 

California Random Drug Testing Law

Random drug testing is not permitted in California, and employers must give their employees notice before a drug test is given.

What happens if you get caught working under the table?

Generally, it is not illegal for your employer to pay you in cash. However, if the employer paid you under the table and did not report your earnings, you may be entitled to money damages under California Labor Code 226.

ADA Proof of Disability

An employer has no right to ask an employee to provide proof of disability unless the employee requests a reasonable accommodation and the employer does not believe disability exists.

FMLA Retaliation and Wrongful Discharge

An employer is prohibited from retaliating, interfering with, restraining, or denying an employee’s exercise of any FMLA right. If an employer wrongfully terminates an employee for FLMA taking medical leave, the worker could have a lawsuit against the employer.

Per Diem Employee Rights

A per diem employee is a worker who work on an as needed basis. A per diem employee does not have a regular schedule or shift but instead works hours as assigned.

How To File A Workplace Harassment Complaint

You can always file a harassment complaint with the EEOC about the harassment. Also, you can retain our employment law attorney to help with no upfront money from you.

Wrongful Termination Settlements

When a worker wins a wrongful termination lawsuit, the average payout amount is $9000 to $95,000, depending on how much the worker would have made during employment.

Can employer ask for proof of disability?

If a worker asks for reasonable accommodation, the employer can ask for proof of disability. However, an employer cannot ask for proof of disability if its part of a hiring decision.

Contact our attorney.

Please tell us your story:

7 + 1 = ?