FILED: MAY 9, 2002

IN THE SUPREME COURT OF THE STATE OF OREGON

TERRY B. McCARTHY,

Petitioner on Review,

v.

OREGON FREEZE DRY, INC.,
an Oregon corporation,

Respondent on Review.

(CC 93-0020; CA A87840; SC S46603)

On review from the Court of Appeals.*

Argued and submitted September 11, 2000.

William G. Wheatley, Jaqua & Wheatley, P.C., Eugene, argued the cause for petitioner on review. With him on the briefs was Nickolas Facaros, Facaros Dugan Rosas, Eugene.

William F. Gary, Harrang Long Gary Rudnick, P.C., Eugene, argued the cause and filed the brief for respondent on review. With him on the briefs were Judith Giers, Karla Alderman, and Brendan C. Dunn, Eugene.

Before Carson, Chief Justice, and Gillette, Durham, Leeson, and Riggs, Justices.**

DURHAM, J.

The order of the Court of Appeals is reversed.

*Appeal from Linn County Circuit Court, Daniel R. Murphy, Judge. 158 Or App 654, 976 P2d 566 (1999).

**Van Hoomissen, J., retired December 31, 2000, and did not participate in the decision of this case. Kulongoski, J., resigned June 14, 2001, and did not participate in the decision of this case. De Muniz and Balmer, JJ., did not participate in the consideration or decision of this case.

DURHAM, J.

The issue on review in this case is whether the Court of Appeals erred in awarding attorney fees on appeal to defendant. The Court of Appeals awarded attorney fees, because that court determined that plaintiff's arguments on appeal were frivolous, unreasonable, or without foundation. We disagree with that determination and reverse the order.

Plaintiff brought an action against defendant for, among other things, an unlawful employment practice. Plaintiff alleged that defendant had discriminated against plaintiff for filing a claim for workers' compensation. Under the applicable statute, the prevailing party in such an action was entitled to recover attorney fees at trial and on appeal. Former ORS 659.121(1) (1995), repealed by Or Laws 2001, ch 621,