Understanding the Minnesota Human Rights Act (MHRA)
A Minnesota jury recently awarded $375,000 to a former director who proved disability discrimination under the Minnesota Human Rights Act (MHRA). On its own, that’s a significant result. But what happened next is what should alarm employers: the trial court also awarded $1,093,033.06 in attorneys’ fees and the Minnesota Court of Appeals affirmed the award.
For employers, the fee award is the real headline. In MHRA litigation, fee exposure can easily outweigh the damages awarded, and in some cases such as this, by a wide margin. This case is a reminder that when you are defending against a discrimination claim, you must consider the potential attorneys’ fees in the case as part of your risk management calculus.
Why Attorney Fee Awards in MHRA Cases Often Exceed Damages
Minnesota courts calculate fee awards using what’s called the lodestar method. That means the court multiplies the number of hours reasonably spent on the case by a reasonable hourly rate, then adjusts the total after considering all relevant circumstances. Those circumstances include:
- The time and labor required
- The nature and difficulty of the case
- The results obtained
- Customary rates for similar services
- The experience and reputation of counsel
Importantly, courts are not required to apply a proportionality rule in making a fee award. A relatively low damage case will not necessarily mean a low fee award. This matters because disability discrimination lawsuits under both the Americans with Disabilities Act and the Minnesota Human Rights Act are usually fact intensive, involving extensive discovery, numerous witness depositions, and hotly contested discovery and pretrial motions. Even when the damages are modest, the hours required to litigate can be significant. The result is that attorneys’ fees can and sometimes will exceed damages.
Case Example: Disability Discrimination Verdict with $1 Million in Fees
In the case referenced above, the plaintiff was a longtime director at Northern Tool who prevailed on a disability discrimination claim after a seven-day jury trial. The jury awarded him $375,000 in past wages. The district court then turned its attention to the plaintiff’s attorneys’ fee petition.
The plaintiff’s attorneys submitted a request that totaled more than $1.2 million. The court scrutinized the petition and cut the request by 15 percent for vague time entries, duplicative work, and signs of over-preparation. Even with that reduction, the award landed just north of $1.09 million.
On appeal, Northern Tool argued that the fee award was excessive and disproportionate. The Minnesota Court of Appeals disagreed. It noted that Minnesota caselaw precedent makes clear that fee awards in MHRA discrimination cases can exceed damages, and that proportionality is part of the court’s analysis. The appeals court affirmed both the amount of the underlying damages and the fee award.
Two points stand out:
- Proportionality is not dispositive.
- Reasoned reductions on fee requests can still result in a significant fee award.
Key Drivers of High Attorneys’ Fees in Minnesota Employment Litigation
Why do fees climb so high in MHRA disability discrimination cases? Several recurring factors tend to drive numbers into seven figures:
- Duration and intensity. Multi-year litigation with continuances, discovery disputes, and multiple motions leads to significant billable hours.
- Fact development. These cases often require testimony from managers, HR staff, co-workers, and medical or economic experts.
- Pretrial motion practice. Motions in limine, evidentiary challenges, and summary judgment briefing consume hundreds of attorney hours.
- Trial length. A week-long jury trial involves months of preparation, from drafting witness outlines to managing exhibits.
- Fee Inflation. Hourly rates for both partners and associates at large law firms have increased by 30-35% since 2020, a historically rapid escalation. This fact has not gone unnoticed by plaintiff’s attorneys, and they use it to their advantage when petitioning the court for an award of attorneys’ fees. Although most plaintiff’s lawyers work off contingent fee agreements, if given the opportunity they will match their rates to those of their defense counterparts. Defense counsel is then hard pressed to argue that the plaintiff’s hourly rate is unreasonable, especially after losing the case on the merits.
Lessons for Employers from Minnesota Human Rights Act Fee Awards
Not every discrimination case ends with a million-dollar fee award, but the lesson is that the risk is real—and it can dominate the economics of the case. Employers who underestimate fee exposure can be blindsided. This means that an employer facing a credible discrimination or retaliation claim with sympathetic facts and weak documentation may find that the rational business move is to resolve the case early through principled settlement discussions. Otherwise, that employer risks paying its own attorneys, losing at trial, and then paying the plaintiff’s attorneys too.
If your business is facing a discrimination claim, our experienced employment law attorneys can help. We work with Minnesota employers to assess risks, strengthen documentation, and craft strategies that minimize financial exposure. Contact us to start the conversation.
