Why it matters

A California appellate panel affirmed the denial of attorneys’ fees for an employee, despite the jury finding that his physical condition was “a substantial motivating reason” for his termination. William Bustos sued his former employer for a variety of claims, including discrimination in violation of the Fair Employment and Housing Act. Although the jury found his physical condition was reason enough for his termination, it returned defense verdicts on each of his claims. Based on the jury finding, Bustos requested more than $450,000 in attorneys’ fees, relying on Harris v. City of Santa Monica. The trial court denied the motion and the appellate panel affirmed. Even under Harris—where the court said “a plaintiff subject to an adverse employment decision in which discrimination was a substantial motivating factor may be eligible for reasonable attorney’s fees and costs,” even if the discrimination did not “result in compensable injury”—the award of attorneys’ fees is discretionary, the appellate panel explained, and the trial court properly exercised that discretion to deny the fee award.

Detailed discussion

Hired by Global P.E.T. in 2010, William Bustos first worked as a sheet line operator and later as a shift supervisor before his termination in 2013. The following year, he filed suit in California state court alleging seven causes of action, including discrimination and retaliation in violation of the Fair Employment and Housing Act (FEHA).

At trial, Bustos told jurors that he was suffering from carpal tunnel syndrome in his left hand and scheduled for surgery the day after his discriminatory termination. Global countered that Bustos was not discriminated against but let go as part of economic layoffs that also resulted in the termination of a number of other employees. The plaintiff also failed one or more drug tests, the employer said.

The jury returned verdicts in favor of the defense on each of Bustos’ claims and awarded him no damages. However, on the special verdict form for Bustos’ disability discrimination/wrongful termination claim, the jury selected “yes” in response to the question, “Was [Bustos’] physical condition or perceived physical condition a substantial motivation reason for [Global’s] decision to discharge [Bustos]?” The jury also found that Global’s “conduct” was not “a substantial factor in causing harm to [Bustos].”

After trial, the plaintiff requested an award of attorneys’ fees in the amount of $454,857.90, pointing to the California Supreme Court’s 2013 decision in Harris v. City of Santa Monica. In that case, the court ruled that employers may properly assert a “mixed motive” defense in discrimination cases to defeat liability for damages where they can show that the employee would have been fired anyway for a nondiscriminatory reason.

Harris also held that an employee who proved that discrimination was “a substantial motivating factor” for his or her termination can still be entitled to injunctive and declaratory relief, as well as reasonable attorneys’ fees and costs.

While the trial court judge acknowledged that he was “mindful” of Harris, he noted the jury found Global’s conduct was not a substantial factor in causing Bustos harm. “[A]t the end of the day, what we get to, even after Harris, is a discretionary call,” the judge said. “He prevailed on nothing in terms of getting—well, he got nothing from the ultimate verdict. And so for those reasons, it would be difficult for me … to award attorneys’ fees notwithstanding the fact that the ultimate judgment is in favor of [Global].”

The trial court denied the motion for attorneys’ fees, and Bustos appealed.

Beginning with the language of FEHA, the appellate panel said the “prevailing party” in a FEHA action may be awarded reasonable fees. Because the statute does not define the term “prevailing party,” trial courts must conduct an evaluation of whether a party prevailed “on a practical level” with an abuse of discretion standard on review.

Applying this standard, the appellate panel found no abuse of the trial court’s discretion. The combination of the jury’s finding that the plaintiff’s physical condition or perceived physical condition was a substantial motivating reason for his termination, even coupled with the holding in Harris, did not mandate that the trial court award him attorneys’ fees, the court said.

“[I]t is important to emphasize that Harris does not require the trial court to award attorneys’ fees to any plaintiff who proves discrimination was a substantial motivating factor of an adverse employment decision; rather, such a plaintiff ‘may be eligible’ to recover attorneys’ fees,” the court emphasized. “Implicitly, therefore, such a plaintiff may not be eligible to recover attorneys’ fees under FEHA, because he or she is not a ‘prevailing party’ as the term is defined in [the statute]. Or, alternatively, in unusual circumstances, the trial court might exercise its discretion not to make an award of attorneys’ fees, even to a plaintiff who is deemed to have prevailed.”

As for Bustos, it “is not beyond reason to conclude that a plaintiff who obtains no relief at trial—either monetary or equitable—has not ‘realized [his] litigation objectives,’ regardless of whether one or more preliminary questions on a special verdict form were answered in his favor,” the court wrote. “Similarly, defendants who obtain judgment in their favor on all claims are reasonably viewed to have ‘realized [their] litigation objectives,’ regardless of how the judgment was reached. As such, the trial court did not exceed the scope of its discretion by ruling that Bustos should not be awarded attorneys’ fees as a prevailing party pursuant to [FEHA] under these circumstances.”

The plaintiff argued that the “seminal issue” decided by the jury was the reason behind his termination and that because jurors found in his favor, he was truly the prevailing party. But the trial court judge remarked on the jury’s findings, and “it was reasonable for the trial court to give priority to the result embodied by the judgment, rather than the jury’s special verdict findings” in determining who prevailed on a practical level, the appellate panel said, noting that the judge also “explicitly acknowledged” Harris in his explanation.

To read the opinion in Bustos v. Global P.E.T., Inc., click here.