California Court of Appeal Rules that ‘Offer of Compromise’ Statute Doesn’t Apply to Nonfrivolous FEHA Cases

Sometimes, helpful and encouraging knowledge can come even from others’ unsuccessful cases. As an example, there’s the recent case of a Los Angeles restaurant server, who lost his race discrimination case. Even though this server lost his discrimination case, his outcome in the appeals court is an important one for anyone who is considering pursuing a discrimination action in court under the Fair Employment and Housing Act. Some people might be frightened away from pursuing their rights and seeking their day in court by the possibility of not just losing but ending up with an outcome where they are left in the position of having to pay the other side.

If you are considering taking on your employer or former employer in court, you should not let it discourage you. As this case revealed, even if your employer makes a statutory settlement offer that you refuse, and you later receiving an unfavorable verdict, you will still not be “on the hook” for any of the other side’s attorneys’ fees or costs, as long as your case wasn’t frivolous or unreasonable. In other words, fear not, and if you have any questions about pursuing your claims, talk to a knowledgeable Oakland employment attorney today.

The server, F.H. worked at a five-star luxury hotel in Los Angeles. While at work, F.H. and another server became embroiled in an altercation. According to F.H., the other employee had uttered various racist slurs toward him, including “beaner” and “[expletive] Mexican.”

After the fight, the employer terminated both servers. F.H. sued for race discrimination, hostile work environment and harassment. The employer provided the server with what’s called, under California law, a “998 offer.” (The number refers to a statutory section governing offers of settlement in civil court cases.) The rules related to 998 offers say that, if, as a plaintiff, you make one, the defense rejects it and then you get more than 25% more in judgment than you offered in settlement, then you can ask for and receive a portion of your attorneys’ fees and other costs. Similarly, if you, as a plaintiff, receive one, reject it and the jury verdict is 25% or greater less than the offer (or the jury returns a defense verdict), the defendant can ask for and obtain payment of some of its attorneys’ fees and costs.

F.H. turned down the employer’s offer. His case went to trial and the jury ruled for the employer. The employer then asked the court, based upon the 998 statute, to force F.H. pay it some of the fees and costs that it had incurred.

Employee’s case wasn’t frivolous, unreasonable or groundless

Ultimately, the Court of Appeal ruled that the employer was not entitled to any payment of fees and costs from the employee because the 998 statute didn’t apply. The statute didn’t apply because F.H.’s case wasn’t a frivolous one. In other words, employees who pursue their rights in court under the FEHA cannot be liable for paying the other side’s attorneys’ fees or costs — even if the defense made a 998 offer, the plaintiff rejected it and the defense won a jury verdict – unless the case was “frivolous, unreasonable or groundless” from the start, or the plaintiff continued pressing forward even after it became obvious that the case was unreasonable or without a valid basis.

F.H. had a reasonable and viable case of discrimination and harassment; he simply lost when the jury made its final decision. In that scenario, he was not legally obliged to pay the employer anything.

If you have been harmed as a result of discrimination or harassment, reach out to the Oakland employment attorneys at the Law Offices of Stephen M. Fuerch. We have helped many people over the years who have found themselves in similar situations, and welcome discussing your case with you. We can help you learn more about plusses and minuses of each of your options. Contact us through our website or call our office at (925) 463-1073 to schedule your confidential initial consultation today.

More Blog Posts:

How California Law May Let You Avoid Arbitration in Your Discrimination Case, Even If You Signed an Arbitration Agreement, Oakland Personal Injury Attorney Blog, Dec. 26, 2018

New Regulations Established by California Clarify and Expand What Can Constitute National Origin Discrimination in the Workplace, Oakland Personal Injury Attorney Blog, Sept. 28, 2018