For the first time, California courts have concluded that an individual defendant who prevails in a harassment claim under the California Fair Employment and Housing Act (FEHA) must demonstrate that the plaintiff’s claim was “frivolous” to recover attorney fees. This is the same standard that applies to employers and is almost impossible to meet.
The appellate court rejected the argument that supervisors and other employees sued as individual defendants should not be subject to the same standard imposed on employers. In deciding to impose the same standard that applies to employers, the appellate court examined the legislative history of the FEHA attorney fees provision. The court reasoned that when the Legislature enacted the FEHA, it rejected the traditional “American rule,” under which the winning party generally is not entitled to recover attorney fees. But, rather than adopting a “prevailing party standard” applicable to the winning party, the FEHA attorney fee provision is one-sided and designed to encourage workers to bring lawsuits to combat harassment, discrimination, and retaliation in the workplace.
According to the court, "[t]he FEHA fee provision is designed to encourage plaintiffs of limited means to bring a meritorious suit; assessing attorney fees against such plaintiffs in non-frivolous cases merely because they do not ultimately prevail would undermine the Legislature’s intent to promote the enforcement of FEHA.”
The same analysis does not apply to a prevailing individual defendant employee. The Legislature explicitly made individual employees liable for harassment under the FEHA, “to ensure a victim’s full recovery and to deter harassment between coworkers.” In these circumstances, there was no reason to treat an individual employee defendant different than an employer defendant.
The court justified its reasoning by stating that even if the lawsuit is not frivolous, individual employee defendants are not stuck with a huge legal bill, as the individual employee may seek reimbursement from his or her employer. Both employee and employer could recover from the plaintiff under the same standard. Therefore, the court said, individual employee defendants who prevail in a FEHA harassment suit are not left without a means of recovering attorney fees and costs they may have incurred to defend themselves.
In Lopez v. Routt, the prevailing individual defendant’s attorney fees were $374,760.75, which amounted to 50 percent of the total fees incurred by the employer defendant in its representation. His attempt to recover attorney fees was denied because “a prevailing defendant may only recover fees upon a showing that the plaintiff's action was frivolous, unreasonable, or without foundation.” The practical effect of this opinion is that an employer is obligated to defend an employee named in a FEHA claim no matter the cost and no matter the result.
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