Losing a FEHA Case in California Does Not Mean Paying the Employer’s Costs

A California Court of Appeal decision published on October 23, 2026 holds that an employer that wins a discrimination or retaliation case under the Fair Employment and Housing Act cannot collect its court costs from the worker unless the judge first finds the worker’s claims were frivolous. The ruling reversed a $15,397.96 cost award entered against a former bakery employee after her FEHA case was dismissed on summary judgment. The case is San Diego-Tomas v. Aspire Bakeries, LLC (A175977), decided by the First District on October 2, 2026.

The rule comes from Government Code § 12965(c)(6). In most California lawsuits the winning side recovers its costs almost as a matter of course. FEHA treats employment discrimination and harassment claims differently. An employer that wins may be awarded fees and costs only if the court finds the case was frivolous, unreasonable, or groundless when it was filed, or that the worker kept litigating after it clearly became so.

Why the Court Threw Out the $15,397.96 Cost Award

Cecilia San Diego-Tomas sued her former employer, Aspire Bakeries, for discrimination and retaliation under FEHA, and added claims for wrongful discharge and breach of contract. The trial court granted summary judgment for the company in October 2025. The company then filed a memorandum of costs with the court. She did not challenge it, and the judge signed an amended judgment confirming the full amount.

A cost award is a court order requiring the losing side to repay expenses the winning side spent on the lawsuit, which under FEHA can include expert witness fees. In an ordinary civil case, a memorandum of costs that goes unchallenged is entered by the court clerk without any review by a judge. The Court of Appeal held that this shortcut does not work in a FEHA case. A clerk has no authority to decide whether claims were frivolous, so an employer seeking costs has to file a motion and have the judge rule on that question.

The court went a step further. Earlier decisions had required a judge to state the frivolousness finding expressly before awarding attorney’s fees to an employer, so that the finding could not simply be assumed from a win. The court found no published decision applying that requirement to costs, and it applied it here. Nothing in the record showed the judge had considered the question. The company’s summary judgment motion never argued the claims were frivolous, and the order granting it never mentioned costs.

What the Ruling Means for Workers Weighing a Discrimination Claim

The California Supreme Court has recognized, as the opinion notes, that the possibility of a cost award can discourage workers from enforcing their civil rights. The decision and the statute together set out the following protections:

• Losing is not enough: a judge must find the claims frivolous, unreasonable, or groundless when brought, or find that the worker kept going after they clearly became so.
• The finding must be stated: a ruling for the employer does not imply it, and an award made without it can be reversed unless the record shows the judge applied the correct standard.
• A cost memorandum alone does not work: the employer has to bring a motion that a judge decides.
• Settlement offers do not change the rule: § 12965(c)(6) applies “notwithstanding” Code of Civil Procedure § 998, so a rejected settlement offer does not override the frivolousness requirement.
• Retaliation claims are covered too: San Diego-Tomas brought both discrimination and retaliation claims under FEHA, and the same section governs both.

The decision has limits, and it does not end this worker’s case. The court sent it back so the trial judge can decide whether the company may still file a late motion for costs, and if so, whether it is entitled to them and in what amount. It also left open how costs connected to her claims outside FEHA, wrongful discharge and breach of contract, should be handled. A worker whose lawsuit pairs FEHA claims with other claims should expect that question to be argued.

The Nourmand Law Firm, APC represents employees, never employers, in FEHA discrimination and retaliation cases across California, from Los Angeles to the Central Valley and the Inland Empire.

What to Do If an Employer Asks for Costs After a FEHA Case

A worker who receives a memorandum of costs or a motion for costs after a FEHA case ends should have it reviewed right away, since the time to respond is short and an unanswered request can end up in the judgment, as it did here before the appeal. The questions are whether the employer used the right procedure, whether any frivolousness finding was ever made, and which claims the costs are tied to. If you would like the firm to look at your situation, call 800-700-WAGE (9243) or contact The Nourmand Law Firm, APC. The first conversation is free.