Employer May Recover Attorney Fees Under FEHA Where Plaintiff's Evidence of Discrimination is Solely Speculation

In the recent case of Robert v. Stanford Univ., No. H037514, 2014 WL 793112 (Cal. Ct. App. February 25, 2014), plaintiff brought an action against his former employer for discrimination under the California Fair Employment and Housing Act (FEHA.) He alleged that he was terminated because of his ancestry, American Indian. At trial, defendant presented evidence that plaintiff was terminated because of his harassment of a female coworker, and that plaintiff had received several warnings before he was terminated. The only evidence of discrimination that plaintiff presented at trial was his own testimony that he believed those who investigated the co-worker's harassment complaint and terminated him, had discriminated against him.

At the close of evidence, the employer moved for nonsuit on the discrimination claim. The trial court granted the motion for nonsuit. Likely to plaintiff's surprise, the trial court then granted defendant's motion to recover its attorney's fees under FEHA. The court did so on the basis that it found plaintiff's discrimination claim was without merit, frivolous, and vexatious. The court found that plaintiff's case was "a legal theory in search of facts," and no facts were presented.

The plaintiff appealed the attorney fee award. The California Court of Appeal affirmed. The record indicated that the trial court had considered the plaintiff's financial condition. The appellate court also found there was no abuse of discretion. Other than his own opinion, plaintiff never had or even claimed to have any evidence that his race played a role in his termination. This reflected the meritless nature of the claim.

This is an interesting opinion for employers. One of the biggest "hammers" in plaintiff arsenals in FEHA cases such as this is the one-sided nature of the right to recover attorney fees. The general rule in FEHA cases (i.e. for discrimination) is that the plaintiff may recover attorney fees from the defendant if he or she prevails, but the employer may not recover attorney fees from the employee if the employer prevails. There is a limited exception to this rule if there is truly no evidence in plaintiff's favor and the plaintiff's claim is frivolous. However, courts are generally reluctant to ever award attorney fees to prevailing employers in FEHA cases. The reason for this is because the employer is in a better position to afford the cost of attorney fees than the plaintiff, and because of the potential chilling effect on employees bringing claims to enforce their rights. In recent years, though, employers are seeing an increasing number of questionable discrimination claims brought by terminated employees. If an employer finds itself on the receiving end of one of these claims, it may be able to use as settlement leverage the fact that the court could invoke the exception and award attorney fees to the employer if it finds the discrimination claim is solely based on speculation.

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