Is an employee entitled to deduct a portion of their attorney fees from the amount used to reimburse the employer?

California, United States of America


The following excerpt is from Summers v. Newman, 20 Cal.4th 1021, 86 Cal.Rptr.2d 303, 978 P.2d 1225 (Cal. 1999):

Following Eldridge, we held in Quinn v. State of California, supra, 15 Cal.3d 162, 124 Cal.Rptr. 1, 539 P.2d 761, that an employee who obtains a judgment against a negligent third party, solely through the employee's own efforts, is entitled to deduct a portion of the employee's attorney fees from the amount of the judgment used to reimburse the employer. Quinn did not address the issue that is before us in the present case, because Quinn differs from the instant case in two important respects: the judgment in Quinn was obtained solely through the efforts of the employee's attorney, and the amount of the judgment in Quinn was sufficient to permit the employee to share in the proceeds. There was no question in Quinn that the employee's attorney fees would be paid from the judgment. The issue in Quinn was whether the amount of reimbursement due the employer would be reduced by an amount equal to a portion of the employee's attorney fees, resulting in a corresponding increase in the employee's share of the judgment.

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