Can a Judge Reduce an Employee’s Attorneys’ Fees Award

The California Fair Employment and Housing Act (FEHA) says that it’s illegal for employers of five or more employees to discriminate against employees because of a protected category, or to retaliate against them because they’ve asserted their rights under the law. The Act also prohibits harassment based on a protected category. In fact, harassment is prohibited in all workplaces, even those with fewer than five employees.

Where an employee prevails on two FEHA employment claims in a lawsuit against his employer but not on numerous others, should he be able to recover over half a million dollars in attorneys’ fees?

Should an award of attorney fees in an employment discrimination case be reduced because of an employee’s unsuccessful discrimination and harassment claims when they are sufficiently linked to the successful retaliation claims?

These questions were recently answered in a case brought before the California Court of Appeals

The Complaint, the Jury Award, and the Judge’s Decision to Reduce the Award

The plaintiff, Renee Vines, sued his former employer, O'Reilly Auto, for violations of the FEHA, alleging race- and age-based discrimination, harassment, and retaliation-related claims. Vines was a 59-year-old Black employee at O'Reilly who claimed he’d been subjected to illegal treatment by his supervisor and coworkers because of his age and race. For example, his supervisor allegedly created false and misleading reviews of him, yelled at him, and denied his requests for training given to younger, non-Black employees. And despite the fact that he complained repeatedly to management regarding his treatment, O'Reilly took no remedial action. Instead, they started an investigation by an O'Reilly district manager—a review that was pretextual and conducted to find a reason to fire Vines. The district manager recommended, and O'Reilly approved, Vines’ termination in July 2017.

Vines alleged six causes of action: two for discrimination (race and age); two for harassment (race and age); retaliation; and failure to prevent discrimination, harassment and retaliation. After a jury found in his favor and awarded damages on his claims for retaliation and failure to prevent retaliation, he moved for an award of $809,681.25 in attorney fees. However, the trial court awarded only about $130,000 in fees. This was based in part on the trial judge’s determination that the unsuccessful discrimination and harassment claims weren’t sufficiently related or factually intertwined with the successful retaliation claims.

The jury found against Vines on his race discrimination (disparate treatment) and harassment claims, saying that race wasn’t a substantial motivating reason for his discharge or other adverse employment action. Also, the jury found that Vines wasn’t subjected to unwanted harassing conduct because of his race. But he did prevail on his retaliation and failure to prevent retaliation claims.

The jury awarded him $70,200 in damages ($35,100 for economic loss and $35,100 for noneconomic loss). And while the jury also found he’d proved that O'Reilly management engaged in unlawful retaliation with malice, oppression, or fraud, or that O'Reilly knew of that conduct and adopted or approved it after it occurred, the jury awarded Vines no punitive damages.

Vines’ Motion for Attorney Fees and O'Reilly's Opposition

Vines moved for an award of more than $800,000 in attorney fees pursuant to California Government Code § 12965. This was supported by numerous attorney declarations, law firm billing records, and other exhibits. Vines argued this calculation was justified because of the difficulty of the case, including the large number of his complaints to O'Reilly; the skills displayed by his attorneys in overcoming that difficulty; and his attorneys' acceptance of the matter on a contingency basis.

Vines also claimed that a downward adjustment wasn’t warranted because the retaliation and failure to prevent retaliation claims on which he prevailed were related to the unsuccessful unlawful discrimination and harassment claims. He also argued that he’d obtained full—not limited— success, as demonstrated by, among other things, the verdict form's providing for a single award of damages no matter the number of FEHA violations to be found by the jury.

But O'Reilly argued that the fee amount should be substantially reduced because a court has discretion to limit fees for unsuccessful causes of action if they weren’t related to the successful causes of action or the plaintiff did not obtain substantial relief. The trial court agreed, and after a hearing, awarded Vines about $130,000 in attorney fees. The court found that Vines was the prevailing party because he’d succeeded on his retaliation and failure to prevent retaliation causes of action, but determined it had discretion to award him reasonable attorney fees. The trial court stated that it “finds that the unsuccessful FEHA claims for discrimination and harassment are not sufficiently related or factually intertwined with the successful retaliation claims. As [O'Reilly] points out, any facts related to [Vines] being retaliated against arose after [he] complained about the discrimination and harassment conduct.”

As a result, since Vines sought fees for the entire lawsuit and found that 75% of the attorney time was spent on the unsuccessful discrimination and harassment claims, the court ruled he wasn’t entitled to recover 75% of the fees for the entire action. Vines appealed that decision.

The Court of Appeals’ Opinion

Presiding Judge Dennis M. Perluss wrote in his opinion for the Court of Appeals that § 12965 authorizes an award of attorney fees to the prevailing party in an action under FEHA, explaining that where a prevailing plaintiff succeeded on only some claims, the court should make a two-part inquiry:

Did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded?
Did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?”

Further, the judge opined that if a plaintiff presents in one lawsuit distinctly different claims for relief that are based on different facts and legal theories, the attorney’s work on one claim will be unrelated to his work on another claim. As a result, the unrelated claims must be treated as if they had been raised in separate lawsuits, and no fee may be awarded for services on the unsuccessful claim. But if a lawsuit consists of related claims, the attorney fee amount awarded for a plaintiff who has obtained “substantial relief” and shouldn’t be reduced merely for the reason the plaintiff failed to succeed on each contention raised.

Vines’ Argument His Claims Were Sufficiently Related or Factually Intertwined

Vines argued the trial court's ruling was based on a faulty analysis that failed to recognize he had to present evidence of the conduct underlying his discrimination and harassment claims to prove the reasonableness of his belief that such conduct was unlawful, as required to succeed on his retaliation cause of action. Judge Perluss noted that it’s well established that a retaliation claim may be brought by an employee who’s complained of or opposed conduct that the employee reasonably believes to be discriminatory, even when a court later determines the conduct won’t actually be prohibited by the FEHA.

The Court of Appeals agreed with Vines that the trial court abused its discretion in determining his reasonable attorney fees. It was error for the trial court to find the claims weren’t sufficiently related or factually intertwined because “any facts related to [Vines] being retaliated against arose after [he] complained about the discrimination and harassment conduct.” Rather, evidence of the facts regarding the alleged underlying discriminatory and harassing conduct about which Vines had complained was relevant to establish, for the retaliation cause of action, the reasonableness of his belief that conduct was unlawful. Citing an earlier decision, the Court of Appeals noted that “employment discrimination cases, by their very nature, involve several causes of action arising from the same set of facts.”

O'Reilly argued that it had never disputed that Vines believed O'Reilly discriminated against him. But Judge Perluss said that such a notion “misapprehends the import of Vines' burden of proof at trial.” He was required to prove that his beliefs were reasonable—which O'Reilly did contest for his complaints to qualify as protected activity required for a FEHA retaliation claim. Therefore, even if O'Reilly hadn’t expressly challenged the reasonableness of Vines’ belief the conduct of which he complained was discriminatory or otherwise unlawful because O'Reilly didn’t stipulate to that fact, Vines had to present evidence proving the reasonableness of that belief to succeed on his retaliation cause of action. That included evidence that his supervisor spoke to White males differently than to Vines (whom, according to Vines’ testimony, his supervisor “talked down to … like an animal”) and mistreated other Black employees and witness testimony of an incident in which four O'Reilly store managers, wearing white pillowcases over their heads, had knocked on a Black O'Reilly manager's hotel room door.

The Court of Appeals held that the trial court erred in reducing by 75% Vine’s $518,161.77 award based on its conclusion that Vines’ unsuccessful discrimination and harassment claims weren’t sufficiently related to or factually intertwined with his successful retaliation-based claims. The post-judgment order awarding attorney fees was reversed. (Vines v. O'Reilly Auto Enterprises, LLC, Court of Appeal of California, Second Appellate District, 1/21/22).

Bottom Line

Employees need not be successful on all of their employment discrimination claims to receive their full amount of attorney’s fees. When unsuccessful claims (like Vines’ discrimination and harassment allegations) are sufficiently related or factually intertwined with successful retaliation claims, the award shouldn’t be reduced just because the plaintiff failed to succeed on each claim raised. This means that even where a Plaintiff recovers $70,000 in damages, his attorneys can recover over $500,000 if attorney’s fees even when they only prevail on some related claims.

Danielle G. Eanet can be reached at Eanet, PC in Los Angeles at Danielle@Eanetpc.com.