• Taxation of Attorneys' Fees in Employment Cases: Supreme Court Agreed to Resolve Hotly-Contested Issue
  • April 6, 2004
  • Law Firm: Nixon Peabody LLP - New York Office
  • Here's a horror story to accompany tax filing season: Banks v. Comm'r, 345 F.3d 373 (6th Cir. 2003), cert. granted, 2004 U.S. LEXIS 2384 (3/29/04); and Banaitis v. Comm'r, 340 F.3d 1074 (9th Cir. 2003), cert. granted, 2004 U.S. LEXIS 2385 (3/29/04). After losing their jobs, Banks and Banaitis both began a legal odyssey that has been nothing if not up and down. The first stop was all right, as they obtained handsome settlements from their employers after bringing wrongful discharge actions. This revenge proved to be not as sweet as it might have been, because their settlement agreements required their former employers to pay a substantial portion (typically 30% to 40%) of the amounts to their attorneys under contingency-fee agreements.