The photos appeared to show the owners, Kenneth Hayden, dressed as Donald Trump, and his wife, Anita, with Confederate symbols with the slogan, "The Southland shall rise again."
Plaintiff Tishay Wright worked for Southland Construction in Pleasanton, California, a San Francisco Bay Area suburb.
After joining the firm in June 2015 as a project administrator, Wright said in her lawsuit that she repeatedly heard the Haydens make derogatory comments about minorities.
She alleges hearing them say things such as, "We'll just make the Mexicans do it," and making fun of Hispanic accents in front of Latino employees, according to her complaint.
In November, Wright said Kenneth Hayden summoned her and another female employee into his office and told them, "Y'all are my b******," before discussing a task. After complaining about his language, she said tensions rose between her and the Haydens.
During the office Christmas party, Wright said Kenneth Hayden handed her a gift. She unwrapped it and found a rhinestone-studded purse of the Confederate flag and several photos of the Haydens posing with Confederate symbols.
"It made me sick to my stomach," Wright told CNN affiliate KGO-TV
in San Francisco. "And I felt like dirt, like he considered me to be less of a human."
CNN reached out to Southland Construction and the Haydens for comment Thursday but did not get a response.
"No one should be treated this way in America in the year 2017," Wright said in a statement. "This is not Alabama in the 1940s. This country is going backwards and it has to stop."
Wright was terminated from her job in March, according to the lawsuit.
Her suit alleges racial and gender discrimination, harassment, retaliation, failure to prevent discrimination, assault, battery, intentional infliction of emotional distress and wrongful termination.