California Sexual Harassment Suit Denied Due to Personal Relationship Outside Work

Sexual harassment in the workplace is illegal in California under the Fair Employment and Housing Act (FEHA). This law provides strict liability for employers when supervisors sexually harass their employees in the workplace. In Atalla v. Rite Aid Corporation, Cal. Ct. App. Case No. F082794, the California Court of Appeal considered a case that involved a supervisor who sexually harassed an employee when the employee and supervisor had developed a longstanding friendship before the employee began working for the company.

In 2017, Hanin Atalia was in her final year of pharmacy school. She completed a six-week rotation at Rite Aid during which she shadowed Erik Lund, who was the district manager supervising between 14 and 16 Rite Aid pharmacies in the greater Fresno, California region. After the end of her rotation, Atalia went out to dinner with Lund and his wife, Vanessa to celebrate. Atalia and Lund subsequently developed a friendship that continued for a lengthy period.

Between May 2017 and Feb. 2018, Atalia worked for CVS Pharmacy as a pharmacist intern while still in pharmacy school. Again while she was still in pharmacy school, Atalia began working part-time as a pharmacy intern with Rite Aid under the direction of the store pharmacist. She reported she only worked around eight hours per month in this role. Atalia began working as a graduate intern pharmacist for Rite Aid in Aug. 2018. On Dec. 23, 2018, she was promoted to a position working as an hourly staff pharmacist for Rite Aid.

During this period following the completion of the initial rotation in the early fall of 2017, Atalia and Lund developed a close friendship. The pair would regularly get together with their spouses for social gatherings, and Lund and Atalia sent each other hundreds of text messages discussing everything from personal topics, exercise, weight loss, vacations, their spouses, meeting for lunch or coffee, and more. Lund and his wife along with Atalia and her husband celebrated Thanksgiving together, and Lund and Atalia regularly met for lunch or coffee during the day at work.

During a deposition, Atalia agreed that she had developed a friendship with Lund before her employment with Rite Aid that was completely unconnected with her work for the company. Lund likewise agreed during his deposition that he and Atalia had developed a friendship before her appointment at Rite Aid and that he considered her to be one of his best friends.

Lund and Atalia got together with their family members and friends to celebrate Atalia's birthday in Dec. 2018. One month later on Jan. 4, 2019, Lund sent a text message to Atalia at 11:07 pm while Atalia was sitting next to her husband at home on her couch. He asked how she was surviving at work, and she replied she thought that things were going well. He then sent a text to Atalia with a picture of four bottles of wine. After Atalia said she'd take the first bottle, they had a back-and-forth conversation about alcohol.

Then, Lund sent Atalia a live video of him masturbating. Atalia turned her phone upside down on the coffee table so that her husband wouldn't see it. She then went into her bathroom to look at it privately. While she was in the bathroom, Lund sent a message stating that he was very drunk and that the video was meant for his wife. Atalia deleted the video and his text and replied that she had deleted both and didn't want to worry about her husband and divorce if he saw them. Lund then sent another photograph of his penis. She sent him a message telling him to stop, and he replied, "You are right." The next morning, Lund sent her a message apologizing and stating he was very drunk the night before. Atalia didn't respond.

Atalia called her training manager on Sunday, Jan. 6, 2019, and told her that Atalia didn't feel well and would not be reporting to work the following week. Lund texted her on Monday, Jan. 9, 2019, and asked if she was still feeling unwell. She didn't respond and blocked his number.

Atalia retained an attorney named John Waterman. Waterman sent Rite Aid a letter on Jan. 10, 2019, in which he asserted a sexual harassment claim. The letter was forwarded to Emily Edmunds, the company's in-house legal counsel. Edmunds talked to Waterman on Jan. 11, 2019. Waterman told Edmunds that Atalia would not be returning to work and that he'd already received a right-to-sue notice and planned to file a complaint on Monday, Jan. 15, 2019. He requested mediation on damages.

Edmunds contacted Ronald Lachin, Rite Aid's human resources leader for the division. Lachin began an immediate investigation and interviewed Lund. Lund admitted to sending the video of him masturbating and the still photo of his penis to Atalia. He was immediately suspended while Lachin investigated to see if there were any previous sexual harassment complaints against Lund and found there were not. Lund was terminated from his job on Jan. 14, 2019.

Edmunds emailed a letter to Waterman on Jan. 14, 2019, to inform him that Lund had been terminated and that Atalia was welcome to return to work. Neither Waterman nor Atalia responded to the letter sent by Edmunds. After receiving no response, Edmunds changed Atalia's status in Rite Aid's system to resigned but eligible for rehire. She sent a separation notice to Atalia on Jan. 22, 2019, and paid her the vacation pay she had accumulated.

Atalia filed a lawsuit against Rite Aid and Lund, alleging multiple causes of action under the Fair Employment and Housing Act (FEHA), including sexual harassment, failing to prevent sexual harassment, constructive discharge, retaliation, and discrimination.

Rite Aid filed a motion for summary judgment and attached 500 pages of text messages. It argued that the relationship between Atalia and Lund predated her employment with Rite Aid and was unconnected to her job with the company. It also argued that she was not constructively discharged since the company immediately investigated her complaint, fired Lund, and told her she could return to work at any time. Atalia opposed the motion for summary judgment.

The trial court found that the harassment arose from a personal relationship that was unconnected to Atalia's employment with Rite Aid. It also found that Atalia was not constructively discharged and instead chose to quit. The court granted summary judgment to all counts. Atalia filed an appeal.

On appeal, the issue was whether the sexual harassment by Lund of Atalia arose out of their personal relationship or work relationship. If the harassment arose out of their personal relationship unrelated to Atalia's work at Rite Aid, the related issue was whether the FEHA prohibited it since Lund was the district manager overseeing the Rite Aid stores in Fresno, including the one at which Atalia was employed.

Under the FEHA, workplace discrimination and sexual harassment are prohibited. Atalia argued that since Lund was the district manager, his conduct towards her fell under the prohibitions against sexual harassment and workplace sex discrimination even if they had a personal relationship that predated her employment.

The court started by considering whether the relationship between Lund and Atalia arose outside of work and before her employment with Rite Aid. The court also considered whether the sexual harassment occurred through Lund's role as a supervisor and if it was prohibited by FEHA. Under FEHA, employers are strictly liable when a supervisor sexually harasses an employee. However, strict liability only attaches when the harasser was acting in the supervisory role. In State Department of Health Services v. Superior Court, 31 Cal. 4th 1026 (2003), the California Supreme Court held that strict employer liability does not attach when the harassing acts arise from a strictly private relationship between a supervisor and employee that is unconnected to employment. The Court of Appeal noted that both Atalia and Lund had agreed during their depositions that they had a personal relationship that predated her employment with Rite Aid and that continued after she began working for the company. The court noted that the pair had an extensive history of texting each other about a broad range of topics, Atalia had claimed that Lund was only her supervisor and that she interacted with him simply to advance her career. However, the court found that this statement was contradicted by her deposition testimony and the hundreds of text messages between Atalia and Lund, including before her employment. The court also noted that when Lund sent the offensive messages, they occurred outside of working hours while both were away from work. Lund was not acting in the capacity of a supervisor at the time he sent those text messages to Atalia.

The court affirmed the trial court's summary judgment order. It awarded Rite Aid its costs on appeal.

If you believe that you have been the victim of illegal workplace sexual harassment, you should consult an experienced employment lawyer at the law firm of Steven M. Sweat, APC. Call us today for a free case evaluation at 866.966.5240.