Kalandra Wheeler
Kalandra Wheeler

In litigation, the American Rule means that in a legal dispute, both parties are responsible for their own attorneys’ fees.  No matter who the victor, each party pays their own way.  For two large companies with sufficient funds to litigate a matter, this rule may not be very harsh.  

But, what does this rule mean to employees in the context of employment disputes?   

In employment disputes, the American Rule may be particularly unfair for an employee who has little in the way of financial resources to pursue a claim or mount a defense against a large company with deep pockets.  Accordingly, under the American Rule, many employers might walk away with no consequences for an injustice against an employee.   

Fortunately, the American Rule may be superseded by statutes and contracts.  There are many laws that protect employees from the type of injustice that could arise from the American Rule. Most statutes that apply to employment disputes provide for the recovery of attorneys’ fees if the plaintiff wins at court.   

But what does the American Rule mean if it is found in an employment agreement?  

When negotiating or entering into an employment agreement, typically one side has greater bargaining power.  The employer has a job the employee wants.  Sure, some will argue that the employee has the option of not accepting a job based on the terms offered. However, in a tight job market, employees may find themselves with only two options: (1) take the job with not so favorable terms or (2) reject the job and remain unemployed while another person takes the position.  Often, it is rare to find a shortage of available and skilled workers. Conversely, there may be a shortage of the right job opportunities.  So, while workers may theoretically have the right to walk away, realistically, financial constraints and obligations may leave them with no real option.  

When entering into an employment contract, there are many rights that an employee may give up.  Accordingly, employees should make sure they understand all of the terms they are agreeing to.  Employees may find themselves giving up the right to leave their place of employment to work for a competitor due to a non-complete clause.  They may give up the right to a trial by jury because of an arbitration clause.  They may even give up their right to pursue legal action against their employer due to financial reasons.  What does this mean?  How does an employee give up the right to pursue legal actions?

If entering into an employment agreement that contains terms memorializing the American Rule, an employee may need to consider whether they can actually afford the cost of an attorney should the employer breach the agreement.  

It may cost tens of thousands or even hundreds of thousands of dollars to litigate an entire case.  When employment statutes provide for the recovery of attorneys’ fees, the employee and their attorney know that if successful, they can recover these litigation fees and costs from the employer.  However, when parties have contracted away their right to recover attorneys’ fees in an employment dispute, the employee may be faced with deciding whether they can afford to pursue their claims against the employer knowing that a successful outcome may not include recovering the fees and costs of going the distance.  If the damages sustained by the employee become relatively minimal after hiring an attorney, or even worse, less than what it would cost to hire an attorney, the employee may be more inclined to walk away.  

In its application, the American Rule in an employment agreement may be fundamentally unfair by making it impossible for the employee in the inferior financial position to later protect their rights if needed.  This means the employer who came in with greater bargaining power has won.  

If you are faced with a job opportunity and have questions or concerns over the terms of an employment agreement, you should consult with an employment attorney to know and understand your rights BEFORE signing.

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Photo of Kalandra N. Wheeler Kalandra N. Wheeler

We asked Kalandra N. Wheeler, a Trial Attorney in the Houston office of Wiley Wheeler, P.C., to provide her sincere answers to a range of questions.  After reading, you will be more more abreast with the understanding and competency that Ms. Wheeler

We asked Kalandra N. Wheeler, a Trial Attorney in the Houston office of Wiley Wheeler, P.C., to provide her sincere answers to a range of questions.  After reading, you will be more more abreast with the understanding and competency that Ms. Wheeler brings.

1.Why did you start practicing labor and employment law?

I wanted to be able to help people that otherwise might not find help. Labor and employment laws affect most of society.  And – whether our results help one or many – our work and efforts as employment lawyers touch people in a real way in their every day lives.

2. Who is your favorite Supreme Court Justice?

Thurgood Marshall.

3. What do you think is the most important part of a good case?

The client. Good facts and evidence are definitely important. But good clients are a lawyers’ most valuable asset.  A good client: (1) is invested in their case; (2) works or worked hard for their employer; (3) can tell their story clearly and concisely; and (4) is someone that a jury will find sympathetic and relatable.

4. If you could write a new law, what would it do?

The Texas Workplace Anti-Bullying law.  I hear the stories, the ones told by employees looking for help. And in far too many of those stories the law offers no solution.  Every employee that goes to work and works hard to do the job they are hired to perform should be able to do so without abuse, harassment, and bullying. There is no justification for bullying, not in our schools, and not in our workplaces.

5. Besides Rob Wiley, P.C., what is the most interesting job that you have had?

For a year before law school, I worked as a lube tech for Jiffy Lube.  I spent hot summer days, working on hot cars, changing oil or flushing transmissions or radiators.  I never had a customer come back with a complaint.

6. How do you market yourself differently than others?

I tell clients what they need to hear, not necessarily what they want to hear. Before a client begins down any path toward resolving an employment dispute, they need thoughtful, honest advice. I am a believer in justice and everyday people deserve competent representation in an arena that is difficult for non-lawyers to navigate.

7. What do you do when you’re not practicing law?

I spend time with family and friends.  I read true crime books.  I sew and draw.

8. How would you describe the color yellow to someone who could not see?

It’s not the intense heat of the sun during the month of August, but instead the softness of the sun on your skin just as the seasons change from Summer to Fall.  It’s warm. And soft to the touch.  It’s fresh squeezed lemonade with a hint of sugar.  Slightly cool, inviting, and happy.

9. What’s your favorite legal TV show?

Law & Order: SVU

10. If you could argue any case in history, what would it be?

The Karen Silkwood case. But really, I think that would be more about arguing and trying a case alongside Gerry Spence for the learning experience.

Kalandra N. Wheeler is a Trial Attorney in the Houston office of Wiley Wheeler, P.C.  She graduated from The University of Houston with a bachelor’s degree in political science.  Ms. Wheeler went on and received her law degree from The University of Arkansas.