Can employer who win the trial against its employee get it’s attorneys’ fees?

California Supreme Court reversed a court of appeal decision that had affirmed the trial court’s ruling in awarding attorneys’ fees to defendant who had prevailed in an employment discrimination case making clear that in California absence of showing that plaintiff employee’s lawsuit was frivolous, unreasonable or groundless, defendant employer may not get the attorneys’ fees even if it prevails in trial.

In Williams v. Chino Valley Independent Fire District, Plaintiff Loring Winn Williams sued defendant Chino Valley Independent Fire District (the District) for employment discrimination in violation of the California Fair Employment and Housing Act. (FEHA; Gov. Code, § 12900 et seq.) The trial court granted summary judgment for the District and, in a separate order, awarded the District its court costs. Williams appealed from the latter order, contending that in the absence of a finding his action was frivolous, unreasonable or groundless, defendant should not have been awarded its costs.

The issues presented to California Supreme Court were: Is a defendant prevailing in a FEHA action entitled to its ordinary court costs as a matter of right pursuant to Code of Civil Procedure section 1032, or only in the discretion of the trial court pursuant to Government Code section 12965, a provision of FEHA itself? And, if the trial court does have discretion, must that discretion be exercised according to the rule applicable to attorney fee awards in certain federal civil rights actions under Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412 (Christiansburg), according to which a prevailing defendant receives its attorney fees only if the plaintiff’s action was objectively groundless?

California Supreme Court concluded Government Code section 12965, subdivision (b), governs cost awards in FEHA actions, allowing trial courts discretion in awards of both attorney fees and costs to prevailing FEHA parties. Furthermore, California Supreme Court concluded that in awarding attorney fees and costs, the trial court’s discretion is bounded by the rule of Christiansburg; an unsuccessful FEHA plaintiff should not be ordered to pay the defendant’s fees or costs unless the plaintiff brought or continued litigating the action without an objective basis for believing it had potential merit. The Court of Appeal erred in affirming the trial court’s award of costs to defendant despite the absence of any finding the action was objectively groundless. The judgment of the Court of Appeal is reversed and the matter is remanded to that court for further proceedings consistent with this opinion.

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