Who pays the lawyer when you claim against your employer?

If you win, the employer pays. If you lose, you do not.

Article 2 of Act 402 of 1950 (32 L.P.R.A. § 3115) is among the most worker-favorable provisions in Puerto Rico law, and very few people know it exists. It says that in any case filed in the courts of Puerto Rico by a worker or employee claiming any right or sum of money against their employer, under federal or local labor legislation or an individual or collective bargaining agreement, **where the claim is granted in whole or in part, the employer shall be ordered to pay attorney's fees**.

And it continues: **when judgment is entered for the defendant employer, the complaining worker shall not be ordered to pay attorney's fees**. Read that again, because it inverts the normal logic of litigation: if you win, the other side pays your lawyer; if you lose, you do not pay theirs.

There is one detail exception: the fee award does not apply if your lawyer is one of the Department of Labor and Human Resources' attorneys. That makes sense, the government already pays for that service.

The rationale is written into Article 1, and it is a sentence worth keeping handy: allowing fees to be charged to a worker who finds it necessary to claim against their employer **is equivalent to allowing the value of their work to be reduced by whatever they pay their lawyer**. The Legislature declared that the public policy of the Government of Puerto Rico is to protect workers from that reduction.

The contract where you agree to pay your own lawyer is void

This is the part that changes decisions most. Article 3 (32 L.P.R.A. § 3116) declares **void and contrary to public policy all contracts, agreements or arrangements in which workers or employees bind themselves, directly or indirectly, to pay fees to their lawyers** in judicial **or out-of-court** claims against their employers under Puerto Rico labor legislation, under Congressional labor legislation applicable to Puerto Rico, or under an individual or collective agreement.

Note 'or out-of-court': the case need not reach a courtroom for the prohibition to apply. And note 'directly or indirectly': a creative arrangement does not save it either.

And if you already paid? Article 4 answers: **any lawyer who receives compensation from a worker, or group of workers, in violation of this Act must reimburse the amount paid, plus an equal sum as liquidated damages**. Double what you handed over. And you do not have to fight it alone: the same provision **authorizes the Secretary of Labor to appear, on behalf of workers, in actions to collect those sums**.

The law's own title adds something worth knowing if you ever find yourself in that conversation: among its declared purposes is **to declare a violation of this Act malpractice of the legal profession**.

There is an exception, and it is about unions, not about you: contracts in which **a labor organization** agrees to pay fees for services rendered **to itself** are valid, provided the fees are not based on a percentage of any right, benefit or wage increase obtained through collective bargaining. That percentage is precisely what the law meant to remove from the bargaining table.

The four conditions that must all be met

The protection is not automatic for any dispute with a boss. In **Ortiz et al. v. Municipality of Lajas, 153 D.P.R. 744 (2001)** the Supreme Court set the four conditions that must all concur for a fee award under Article 2, and the Labor Prosecutor expressly restated them in the opinion of July 8, 2026:

The one that decides almost every hard case is the second. In *Ortiz*, municipal employees claimed under the Personnel System of the Autonomous Municipalities Act, and the Court held that **because that is not labor legislation, a fee award did not lie**. The claim was real, the dismissal was real; what was missing was that the claim arise from labor legislation.

So what counts as 'labor legislation' here? The Court explained it in a way that serves as a compass: local labor legislation arises mainly under **sections 16, 17 and 18 of the Bill of Rights of the Constitution**, which recognize the right to freely choose one's occupation, to equal pay for equal work, to a reasonable minimum wage, to protection of health and personal integrity, to an eight-hour day with overtime at no less than time and a half, to organize for collective bargaining, and to strike and picket.

From there come two areas: the one setting **working conditions themselves** (minimum wages, overtime) and the one creating **mechanisms to preserve and improve those conditions**, the right to strike, to organize. The Court added that labor legislation is what creates causes of action for discrimination and sexual harassment, sets minimum wages, requires workplace safety and health, and regulates labor-management relations, unions and strikes.

Public service personnel systems, by contrast, are of an **essentially different character**: they revolve around the merit principle and position administration (classification, recruitment and selection, promotions, transfers and demotions, training and retention) not the working conditions protected by the Constitution.

• That **an employee makes a claim against their employer**.
• That the **claim arises under labor legislation**.
• That the **employer is an 'employer'** under Act 402.
• That **the claim is granted**.

If you work for the government, read this twice

The third condition (that your employer be an 'employer' under this law) carries its own trap. Article 2 provides that, for purposes of Act 402, the word 'employer' **shall include the Authorities and Public Corporations of the Commonwealth Government and/or their representatives**. That is an express and limited inclusion, not blanket coverage of the whole public sector.

Combine that with the second condition and you see the public employee's real problem: if your claim arises from your agency's personnel regulation, the merit principle, or your classification and pay plan (transfers, promotions, salary adjustments) it may well not count as a claim 'under labor legislation,' which is exactly what *Ortiz* held. If it arises from a protective labor statute that does apply to you, the conversation is different.

The Labor Department also drew its own line in the 2026 opinion: **its jurisdiction and authority to intervene is in the private labor sector and in public corporations doing business as private entities**. When the consultation required interpreting a statute the Department does not administer (the Electoral Code, in that case) it abstained as outside its reach.

The practical takeaway for a public employee: before assuming the employer will pay your lawyer, pin down exactly which law you are claiming under. Challenging a transfer under your agency's regulation is not the same as filing a complaint for discrimination, overtime or retaliation.

If the case settles without reaching court

The law anticipated out-of-court settlement, which is how most labor claims end. Article 2 provides that where the claim **is satisfied out of court**, the parties, in addition to complying with settlement law, **if they do not agree on the fees to be paid by the defendant employer to the worker's attorney**, must submit that determination **to the court that would have had jurisdiction over the case**. And it adds: **costs in these proceedings shall be borne by each party**.

What to take from it: even in a private settlement, fees are paid by the defendant employer to the worker's attorney, and if there is no agreement on the amount, it is not resolved by deducting it from you; it goes before the court that would have heard the case.

That is exactly where you should read with a magnifying glass any settlement document put in front of you. An agreement that nets the fees out of your compensation is doing precisely what Article 1 identified as the harm to avoid: reducing the value of your work through the lawyer.

What you will not get by asking the Labor Department for an opinion

The Office of the Labor Prosecutor issues legal opinions to orient the public, and they are public documents worth their weight when one exists on your topic. But it has limits worth knowing before writing the letter, and it lists them itself:

Translated: do not ask the Labor Department to decide your case. Its opinion helps you understand how the Department interprets a law it administers; it does not replace a complaint, an administrative hearing or a lawsuit.

What you can do today without a lawyer and at no cost: file a complaint with the appropriate Bureau when the matter is wages, hours or working conditions, and request general written guidance. And if the case goes to court, you now know what Article 2 says about who pays the fees.

• It **abstains** from opining on matters that may be investigated by DTRH offices, and on those before or potentially before an administrative body or judicial review.
• It **does not intervene or opine** on matters involving the validity of contractual provisions.
• It **does not opine** on laws and matters outside DTRH jurisdiction.
• It **does not directly handle** individual citizens' or employees' situations beyond general written guidance on request.