In William Bustos v. Global P.E.T, Inc., et al. (Cal Ct. App., Dec. 22, 2017, No. E065869), William Bustos brought a disability discrimination action against his former employers, Global P.E.T., Inc. and Global Plastics, Inc. after he and other co-workers were terminated in an economic layoff. Mr. Bustos alleged that he was suffering from carpal tunnel syndrome and was terminated the day before he was scheduled for surgery on his hand. He asserted various disability discrimination claims under the California Fair Employment and Housing Act (“FEHA”).
The jury found that Mr. Bustos’s physical condition, or perceived physical condition, was “a substantial motivating reason” for his termination. However, the jury also determined that his employer’s conduct was not “a substantial factor in causing harm” to Mr. Bustos. As a result, the jury did not award any damages to Mr. Bustos. Following trial, Mr. Bustos sought $454,857.90 in attorney’s fees as the prevailing party, which the trial court denied after noting that Mr. Bustos “lost virtually everything in terms of the trial on the contested issue.”
By statute, the “prevailing party” in a FEHA action may be awarded reasonable attorney fees. (Gov. Code § 12965.) Because FEHA does not define the term “prevailing party,” prevailing party status is determined by the court based on an evaluation of whether a party prevailed on a practical level. In other words, a trial court must identify the prevailing party by analyzing the extent to which each party has realized its litigation objectives.
In determining whether the Trial Court abused its discretion when it denied attorney’s fees to Mr. Bustos, the Appellate Court considered the California Supreme Court decision in Harris v. City of Santa Monica (2013) 56 Cal.4th 203. Under Harris and Government Code section 12965, a plaintiff “may be eligible” to recover attorney’s fees, but a trial court is not required to award attorney’s fees to any plaintiff who proves discrimination was a substantial motivating factor of an adverse employment decision.
In reaching its decision, the Appellate Court explained that the trial court appropriately exercised its discretion when it determined that Mr. Bustos was not the prevailing party. Mr. Bustos argued that the seminal issue in the case was whether he was terminated as a result of layoffs, as his employer contended, or whether he was terminated as a result of his alleged disability. Since that issue was decided in his favor, Mr. Bustos contended that the Trial Court abused its discretion when it determined he was not the prevailing party.
However, the Appellate Court concluded that Mr. Bustos had not realized his litigation objectives – to obtain monetary or equitable relief. On the other hand, the employer realized its litigation objective because a judgment was returned in its favor and no damages were awarded to Mr. Bustos. Accordingly, Mr. Bustos was not the prevailing party and could not recover attorney’s fees under Government Code section 12965.
While this case should be considered a win for employers, it is also a reminder that employers should evaluate potential attorney’s fees issues as early as possible when an employee files suit.
This document is intended to provide you with information about employment and labor law related developments. The contents of this document are not intended to provide specific legal advice. This communication may be considered advertising in some jurisdictions.