Best v. C&M Door Controls, Inc., 2009 N.J. LEXIS 1000 (2009)

The Supreme Court of New Jersey recently held that a defendant/employer cannot be awarded attorney’s fees under New Jersey Court Rule 4:58 (the offer-of-judgment rule) in a case involving the New Jersey Conscientious Employee Protection Act (“CEPA”) and the Prevailing Wage Act (“PWA”), however a plaintiff/employee’s rejection of a reasonable settlement offer may be taken into consideration in determining the amount of attorney’s fee’s to be warded to a prevailing employee.

Best v. C&M Door Controls, Inc., 402 N.J. Super. 229 (App. Div. 2008)

In this appeal, the Appellate Division considered the interplay between two competing public policies, each of which are fostered by awarding legal fees to the prevailing party. On the one hand, the New Jersey Legislature has adopted certain fee-shifting statutes, in this case the Prevailing Wage Act (“PWA”), N.J.S.A. 34:11-56.25 to -56.47, in order to ensure that plaintiffs with bona fide claims are able to find lawyers to represent them, to attract competent counsel in cases involving statutory rights, and to ensure justice for all citizens. On the other hand, to encourage early out-of-court settlements, the New Jersey Supreme Court adopted the offer of judgment rule, Rule 4:58 (the “Rule”), permitting  an award of legal fees and costs to a prevailing party whose offer of judgment has been rejected by the other side.

Michael v. Robert Wood Johnson University Hospital, 2008 N.J. Super. LEXIS 13 (NJ App. Div. Jan. 15, 2008).

A prevailing defendant may be awarded attorney’s fees in an action brought under the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. (the “LAD”), only if it can show that the losing plaintiff brought the claim in “bad faith.” N.J.S.A. 10:5-27.1. In Michael, the Appellate Division held that “bad faith,” in this somewhat unusual context, does not imply that the suit was initiated for a dishonest purpose, but rather equates to “a reckless disregard or purposeful obliviousness of the known facts.” Moreover, the Appellate Division instructed that, in determining what constitutes a “reasonable” award of attorney’s fees, the trial court should take into account the losing plaintiff’s ability to pay, as well as “the extent to which plaintiff pursued the matter because of her own views or . . . relied, either exclusively or partially, upon the advice of counsel.”