The Supreme Judicial Court today affirmed a lower court's decision to award attorneys' fees of $16,153 to the plaintiffs' lawyers in a case where the plaintiffs privately settled their wage claims against the defendants.
The Massachusetts Wage Act requires employers to pay their employees all their earned wages. An employee who sues their employer for failing to pay all wages earned is said to have "prevailed," and can recover their attorneys' fees and costs. In other words, if an employee sues their employer under the Wage Act and wins, the Wage Act requires the employer to pay not only the employee's damages but also the employee's attorney.
In this decision, Belky Ferman v. Sturgis Cleaners, Inc., the SJC held that an employee who sues their employer and settles may still be considered to have "prevailed" - and therefore be entitled to recover attorneys' fees - if the employee's lawsuit was a necessary and important factor in causing the employer to provide a "material portion" of the remedy the employee was seeking.
What makes this decision interesting is the SJC's reasoning. The SJC held that awarding attorneys' fees based on a settlement is appropriate because it promotes the two major purposes of the Wage Act's fee-shifting provision: first, to disincentivize illegal conduct; and second, to encourage lawyers to take cases that otherwise would not be financially prudent for them to take on, and in so doing help people who might not be able to afford a lawyer vindicate their rights.