Usually not. An employer that wins a discrimination, harassment, or retaliation case under California’s Fair Employment and Housing Act can recover its attorney fees and costs only if the court finds the case “was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so,” under Government Code section 12965(c)(6). That limit covers ordinary court costs too. Wage claims have their own rules. Knowing them early shapes how an employer budgets a defense and when it settles.
What does FEHA say about fees for a winning employer?
It gives the court discretion, with a one-sided limit. Section 12965(c)(6) provides that “the court, in its discretion, may award to the prevailing party, including the department, reasonable attorney’s fees and costs, including expert witness fees.” The same sentence then carves out defendants: “notwithstanding Section 998 of the Code of Civil Procedure, a prevailing defendant shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so.”
A winning employee, by contrast, ordinarily recovers fees. That asymmetry is deliberate, and it’s the most important cost fact in any FEHA defense. An employer that wins at summary judgment or trial will usually bear its own fees.
The reference to section 998 matters too. A pretrial settlement offer under Code of Civil Procedure section 998 normally shifts certain costs when the other side rejects it and does worse at trial. In a FEHA case, the statute says a prevailing defendant still needs the frivolousness finding before it recovers fees and costs.
Does the same rule apply to ordinary court costs?
Yes. In Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, a firefighter lost a disability discrimination case on summary judgment, and the trial court awarded the employer $5,368.88 in costs without finding the case groundless. The Supreme Court of California reversed.
The court held that “an unsuccessful FEHA plaintiff should not be ordered to pay the defendant’s fees or costs unless the plaintiff brought or continued litigating the action without an objective basis for believing it had potential merit,” according to the opinion. It added that a prevailing defendant “should not be awarded fees and costs unless the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so.”
The court explained its concern in practical terms. “In FEHA cases, even ordinary litigation costs can be substantial, and the possibility of their assessment could significantly chill the vindication of employees’ civil rights,” it wrote. Filing fees, deposition transcripts, and the other items an employer would normally recover after winning are subject to the same standard as attorney fees.
When is a FEHA case “groundless”?
When there was no objective basis for it, not just when it lost. Losing doesn’t make a claim groundless. The test asks whether a reasonable person could have believed the claim had potential merit when it was filed, or whether the claim later lost any merit and the employee kept litigating anyway.
That second path is the one worth watching. A claim that looked plausible at filing can lose its footing after discovery, for example when the employee admits in deposition that the key facts in the complaint didn’t happen. If the employee keeps pressing after that point, a fee request covering the later work has a better chance. A clear, written record of when and why the claim fell apart helps support it.
Courts don’t make these findings often. Employers should treat a fee award as possible in a weak case, not as part of the expected recovery. The motion itself costs money to bring, and a judge who denies it may view the request as heavy-handed, which can affect how the rest of the case goes if anything remains to be decided.
| Claim type | Fee rule for a prevailing employer | Source |
|---|---|---|
| FEHA discrimination, harassment, retaliation | Only if frivolous, unreasonable, or groundless when brought, or pursued after it became so | Gov. Code § 12965(c)(6); Williams |
| FEHA ordinary court costs | Same standard as fees | Williams |
| Nonpayment of wages, benefits, or fund contributions | Only if fees were requested at the start of the action and the employee sued in bad faith | Lab. Code § 218.5(a) |
| Minimum wage and overtime | Statute provides fees for the employee, with no employer counterpart | Lab. Code § 1194(a); § 218.5(b) |
What about wage claims?
The rules differ by claim. For actions over unpaid wages and benefits, Labor Code section 218.5(a) allows fees only “if any party to the action requests attorney’s fees and costs upon the initiation of the action,” and “if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith.” That’s a different test from FEHA’s, but it’s still demanding.
Minimum wage and overtime claims are different again. Labor Code section 1194(a) lets an employee recover unpaid minimum wage or overtime along with “reasonable attorney’s fees, and costs of suit.” And section 218.5(b) says that section “does not apply to any cause of action for which attorney’s fees are recoverable under Section 1194.” In practice, an employer that defeats an overtime claim shouldn’t expect a fee award under either statute.
Wage claims that begin before the Labor Commissioner have their own fee rules on appeal, covered in the firm’s post on Berman hearings.
How should this affect defense strategy?
It changes the settlement math. Because a winning employer usually can’t recover what it spent, the cost of defending through summary judgment or trial is part of the real exposure, even in a case the company expects to win. An early, accurate assessment of the claim’s strength is worth a lot here.
It also argues for building the record. When a claim looks weak, the defense should document the weaknesses in writing as they emerge, through meet-and-confer letters, targeted discovery, and early motions. Those documents are what a court would look at if a fee motion becomes realistic, and they often bring a plaintiff’s lawyer to the table sooner.
Arbitration doesn’t offer a way around these limits. An arbitration agreement that tried to give the employer broader fee rights than the statute allows would invite a challenge to the agreement. The firm’s post on CRD complaints and right-to-sue notices covers how FEHA claims start.
When a FEHA or wage lawsuit is filed
- Preserve the employee’s personnel file, the decision documents, payroll and timekeeping data, and the emails and texts among the managers involved.
- Calendar the response deadline on the summons, and check for an arbitration agreement and an employment practices liability (EPLI) policy with notice terms.
- Identify the witnesses and decision-makers, and stop any further action involving the employee that could look like retaliation.
- Pull the documents that test the complaint’s key facts early, so weaknesses can be raised in writing as soon as they appear.
- Get a candid assessment from counsel of defense costs through summary judgment and trial before responding to any settlement demand.
These rules make the first assessment of a case unusually important. The firm’s employment defense attorneys in California handle that assessment as part of every new matter.
Fee recovery questions employers ask
If we win at summary judgment, will the court award our costs?
Not automatically in a FEHA case. Under Williams, the court first has to find that the action had no objective basis when it was filed, or that the plaintiff kept litigating after it lost any. Without that finding, even ordinary costs like filing fees and deposition transcripts usually stay with the employer.
Does a rejected section 998 offer change the result?
Not for FEHA fees and costs. Section 12965(c)(6) applies “notwithstanding Section 998 of the Code of Civil Procedure.” A 998 offer can still be useful for other reasons, such as framing settlement value, but it doesn’t remove the need for a frivolousness finding in a FEHA case.
What if the complaint mixes FEHA claims with other claims?
Each claim’s fee rule applies to that claim. Contract or tort claims without a fee statute follow the ordinary rules, while FEHA and wage claims follow their own. Courts sometimes have to separate the work done on each, so billing records that track claims separately help any later motion.
Can we ask the employee to pay our fees in a settlement?
A settlement is a negotiated agreement, so the parties can agree to whatever terms they accept. Employers shouldn’t expect a fee payment from the employee. The more common outcome in a weak case is a walk-away settlement, where each side bears its own fees and the employee dismisses the claims.
If your company is defending a FEHA or wage lawsuit
If your company has been sued under FEHA or the Labor Code, the strength of the claim and the cost of defending it usually decide how much of it is real. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving discrimination and unpaid wages. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statutes are Government Code section 12965, Labor Code section 218.5, and Labor Code section 1194. The case is Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.