Clients always ask me about settlement and trials. If we do not accept $XX, what will happen at trial, they essentially ask. There is little or no empirical data for that process and how it plays out. Every client must often rely on the judgment of his/her lawyer.
A good rule of thumb is that most trials occur because the employer offered little or nothing to settle the case. We see this in the case of Ransom v. Patel Enterprises, No. 10-CA-857 in the Western District of Texas. In Ransom, the employees sued for overtime, arguing they were mis-classified as exempt from overtime wages. The two parties both filed motions for summary judgment.
At some point, the plaintiffs offered to settle their claims for $120,000 total. That amount included $65,000 for actual damages, i.e. wage violations. The rest included attorney’s fees and court costs. The jury later awarded $135,000 in wage violations.
While, the Defendant never offered more than $10,000 to settle the case. Unfortunately for the employer, the court later awarded $332,000 in attorney’s fees, and another $9,000 in court costs. As often occurs in civil rights cases, the attorney’s fees portion of the case is worth as much or more than the actual violation.
So, yes, if the employer offers a low amount to settle – i.e., low in relation to the hoped for recovery – then it makes sense to proceed to trial. $10,000 when you are seeking $467,000 (135,000 + $332,000) is a pretty low amount. It makes sense to wait and hope for more from the judge and jury. It is easy when the employer offers so little. But, if they offer 80-90% of what you hope to recover at trial, then the decision whether to accept becomes much more difficult.