No Bar on Public Interest Attorneys Simultaneously Negotiating Settlement on Merits and Attorneys’ Fees in NJLAD and CEPA Matters

Pinto and Vasquez v. Spectrum Chem. and Lab. Prods., 2010 WL 183753 (N.J., January 21, 2010) – The New Jersey Supreme Court has held that public interest attorneys are not precluded from simultaneously negotiating with defendants a settlement on the merits of a plaintiff’s claims and counsel fees in cases brought under New Jersey’s Conscientious Employee Protection Act (CEPA) and the New Jersey Law Against Discrimination (NJLAD). In so holding, the court reversed the rule first announced in Coleman v. Fiore Bros., 113 N.J. 594 (1989), which created such a ban in cases involving the Consumer Fraud Act (CFA).

The Supreme Court focused on the detrimental impact such a ban would have on the number of settlements reached, finding it would run counter to the policy of promoting settlement discussions. A defendant seeking to resolve a case is looking for closure, not open-ended financial liability, the court said. When the parties cannot understand the “bottom line,” both defendants and plaintiffs are harmed, because fewer settlements will be reached.