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NJ Employment laws, such as the Law Against Discrimination (used for sexual harassment and other discrimination claims) and the Conscientious Employee Protection Act (protecting whistleblowers) require a losing employer to pay the employee’s attorneys’ fees.
Due to the risk of non-payment, attorneys for employees also are permitted to apply for a “contingency fee enhancement,” usually between five and fifty percent. Employment lawyers call this a “Rendine enhancement” based on the court decision that created it. A recent decision from the United States Supreme Court interpreting federal laws raised doubt about whether a Rendine enhancement could continue under New Jersey law.
In a unanimous decision for two consolidated cases, the Supreme Court of New Jersey strongly upheld contingency fee enhancements: “The mechanisms for awarding fees, including contingency enhancements, that we adopted in Rendine shall remain in full force and effect as the governing principles for attorneys’ fee awards made pursuant to fee shifting provisions in our state statutes and rules.” See Walker v. Route 22 Nissan Inc. and Humphries v. Powder Mill Shopping Plaza (both decided January 25, 2012).
In reiterating Rendine, the Supreme Court explained the four reasons supporting contingency fee enhancements. “First, they are designed to address the problem of unequal access to the courts” for employees, consumers, and the disabled. “Second, they are intended to provide the individuals, whose rights are being protected by the statutes, with the resources to enforce those rights in court.” Third, fee enhancements “operate so as to encourage adequate representation which is essential to ensuring that those laws will be enforced.” Finally, “fee-shifting provisions are designed to promote respect for the underlying law and to deter potential violators of such laws.”
The Supreme Court’s decision in Walker and Humphries emphasizes the importance of fee enhancements in employment law, civil rights, and consumer cases to attract competent attorneys who work on a contingent fee basis against well-funded defendants paying their attorneys an hourly rate each month while also financing the costs of litigation. By attracting competent plaintiff’s attorneys, fee enhancements guarantee equal access to the courts regardless of the ability to pay.
Please contact our NJ Employment Lawyers if you have any questions.