Attorneys' Fees Recovery for Small Businesses

Too often, the expense and burden of defending against a citation from an agency are so severe that small businesses are coerced into settling when a regulatory agency pursues a minor, or even meritless, action. Current law allows small businesses to recover attorneys’ fees if they are successful only after they have proved, in a separate proceeding, that the government’s actions were not “substantially justified.” This provision has all but eliminated the possibility of small businesses recovering their legal fees.

Background

In the 106th Congress, the Chamber strongly supported the Fair Access to Indemnity and Reimbursement (FAIR) Act (S. 1158, H.R. 1987), a version of which had passed the House in the 105th Congress. The FAIR Act sought to allow small businesses to recoup attorneys’ fees when they prevail in administrative or court cases brought by the Occupational Safety and Health Administration (OSHA) or the National Labor Relations Board. More recently, in the 108th Congress, the Chamber was a leading supporter of a bill (H.R. 2731) introduced by Representative Charlie Norwood (R-GA) that passed with bipartisan support but was not pursued in the Senate. This bill would have repealed the substantial justification obstacle to small businesses recovering their legal fees when they prevail in cases against OSHA. Similar legislation is expected to be introduced in the 109th Congress in the House and possibly in the Senate.

U.S. Chamber Position

The Chamber remains committed to supporting reform of this law.

Staff Contact Information

Labor, Immigration, and Employee Benefits Division
(202) 463-5522.