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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
Satisfied Customers: 7352
Experience:  Significant experience in all areas of employment law.
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Hello, I own a janitorial service in California and employ

Customer Question

Hello,
I own a janitorial service in California and employ about 300 persons.
I have been served recently for a wage an hours claims lawsuit.
It is bogus and we don't owe this person anything, however I cannot afford , nor do I care to pay for any attorneys fees for the win of even 20.00 on the OT to the plaintiff.

The lawsuit did not disclose what the damages are or what I am being sued for. So, to avoid legal fees that will accrue on both the defense and the opposition side, my counsel and I have decided to ask for a demand letter to asses what it is they want in terms of the monetary damages.
The response from opposing counsel to my attorney was, "Let me talk to my client to see what he wants to do".


My question is this, I am not interested in going around and around with opposing counsel on this and jacking up legal fees. I have made it very clear that I want to see what he wants, and begin to negotiate and get this over with and cost effectively as possible.

My question is this, doesn't opposing counsel HAVE TO give us a demand letter if we ask for it?
Also, if they don't then what are my options so that we can force the issue.
I know judges don't like this kind of crap and would be interested to know that I want to settle and they are dragging it out.
I have some options here don't I?

Thanks,

Gina
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 1 year ago.
Gina,

Good evening and thank you very much for your question. It is good to hear from you again.

The position you are in is an unfortunate one because California law generally provides that each party bear their own litigation costs. So, even if a defendant "wins" at trial, they still may have "lost" financially speaking, since they paid so much in attorney fees to obtain that result.

This problem is magnified in the employment context because, while a prevailing employer does not get to recoup any of their fees, prevailing employees have a statutory entitlement to reimbursement for THEIR fees. This is one of the few exceptions to the general rule that each side always bears their own costs.

So, if this employee won even some modest award but accrued the equivalent of $20,000 in attorney fees to obtain it, you as the employer would be on the hook for that amount in addition to the actual back wages.

Fortunately, there is a way to curtail your liability for the plaintiff's attorney fees that is also likely to trigger immediate settlement. That is by making what is called a "998 offer." A 998 offer is an offer to settle the case made pursuant to section 998 of the California Civil Code. That section provides that when a 998 offer is made, rejected, and the party who made the offer obtains a more favorable award at trial, the party who rejected the offer is now liable for any costs made subsequent to the date of the offer. Costs include things like motion fees and expert witness fees. Unfortunately, costs do not include your attorney fees. HOWEVER, the plaintiff's statutory entitlement to collect THEIR attorney fees as a prevailing plaintiff will extinguish once they reject the 998.

The was all quite a mouthful, so let me try to re-explain by example. Say you make an offer to settle pursuant to section 998 for $5,000. If the employee rejects that offer and then they only obtain an award at trial of $4,000, THEY are now responsible for the costs you incurred subsequent to making the offer (again, remember this doesn't include your attorney fees). Although a prevailing plaintiff in a wage claim is generally entitled to their attorney fees by statute, the 998 extinguishes that entitlement for all attorney fees accrued after the date the settlement offer is rejected, so if $10,00o is accrued in fees by the plaintiff after the 998 is rejected, they would be barred for collecting that amount if they prevailed on their underlying claim, even though by statute they would ordinarily be entitled to it.

998 offers in employment cases are a powerful tool because many plaintiffs (and their attorneys) are counting on recovering their attorney fee award. The 998 poses a serious threat to that and, therefore, if the offer is reasonable, is likely to be accepted.

The other option in terms of resolving the case and limiting attorney fees is to propose what's called binding arbitration. Binding arbitration is kind of like an informal "mini trial" that takes place out of court before an arbitrator (usually a retired judge). Each side presents their arguments and evidence and the arbitrator issues a binding ruling.

The great thing about arbitrations is that they are not part of the formal judicial process, so you can set your rules to whatever you can agree on with the other side. If you want a binding arbitration with a "ceiling" (a maximum award), that's fine, and if you want a floor and a ceiling, that's okay, too. Binding arbitration is a great option for parties looking to quickly resolve disputes and keep costs down. Of course, both sides must agree to an arbitration in order to go that route, but proposing an arbitration to the plaintiff sounds like it might be a really good option for someone in your circumstance.

If binding arbitration is not an option, you can also propose a simple mediation. Mediation is just a settlement discussion with an impartial, neutral middle man (the mediator), who attempts to find common ground between the parties and facilitate a settlement.

Any of these options are better than simple asking for an offer. You don't want to come across as too eager to settle because the plaintiff will sense that and then try to take advantage.

While the plaintiff is always free to insist on their "day in court" and refuse to settle or negotiate, that would be highly uncommon, and in general, a 998 offer, arbitration, or mediation, will be sufficient to resolve a wage claim.

I hope that my explanation of these options proves helpful to you. As always, please feel free to let me know if you have any further concerns. If I have answered your question, I would be very grateful for a positive rating of my service so that I may receive credit for assisting you.

Kindest regards.
Patrick, Esq., Lawyer
Satisfied Customers: 7352
Experience: Significant experience in all areas of employment law.
Patrick, Esq. and other California Employment Law Specialists are ready to help you
Customer: replied 1 year ago.


Thank you so much legal pro,


 


This is excellent information which I shall surely use moving forward.


Great!!


Are you located in SF, CA or in LA, CA?


Thank again, I will keep you posted.


 


Best,


Gina

Expert:  Patrick, Esq. replied 1 year ago.
I am located in the Los Angeles area.

Please let me know if I can be of any further assistance to you, and if you have additional questions in the future, feel free to request me by addressing your question "To Legalpro54."

Best of luck moving forward.
Customer: replied 1 year ago.


Im not sure of what the rules of the game are, however I work in LA several times a month, are you allowed to meet new clients thru this service?


If so, I am in the market for new counsel, perhaps I could meet you or an associate.


Please let me know if this would work,


Thanks

Expert:  Patrick, Esq. replied 1 year ago.
Thank you very much for considering me in that respect. Although it would be my pleasure to represent you, the terms of service here on Just Answer prohibit us from meeting clients off the site. I am very sorry.

If you need an attorney referral, I would suggest http://www.avvo.com. You can search attorneys via practice area and location, and the site provides ratings with some limited background checks so you have an idea who you're dealing with.

Please let me know if I can be of any further service.
Customer: replied 1 year ago.


Ok no problem that is what I thought.


No worries.


Have e great day!


Gina

Customer: replied 1 year ago.


Hello,


I do actually have one more question.


Are there any monetary benefits or other benefits to arbitration versus mediation.


I've done the mediation route before and it was a bit of a joke, not impressed.


 


Best,


G

Expert:  Patrick, Esq. replied 1 year ago.
Gina,

Thank you very much for your reply. Arbitration is usually a little bit more expensive than mediation because the process is more involved and a bit more time-consuming. Arbitration actually entails the actual presentation of your case, very much like you would at trial but with less strict rules of evidence, whereas mediation is more conversational and less formal.

The benefit of arbitration over mediation, of course, is that it is binding and is almost impossible to appeal. This is in contrast to mediation, where from past experience I;d say that only 60% or so result in settlement.

Aside from the above, there's not too much I can think to say about the difference between the two processes.

If I can be of any further service just let me know.

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