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Aichele v. Blue Elephant Holdings, LLC

United States District Court, D. Oregon

November 13, 2017

BLUE ELEPHANT HOLDINGS, LLC, a domestic business corporation doing business as the Human Collective II, and DONALD MORSE, Defendants.

          CRAIG A. CRISPIN ASHLEY A, MARTON Crispin Employment Lawyers Attorneys for Plaintiff

          CAROLINE R. GUEST KELLY S. RIGGS Ogletree, Deakins, Nash, Smoak & Stewart, P.C. Attorneys for Defendants



         This matter comes before the Court on the Motion (#31) for Summary Judgment and Motion (#36) for Discovery Sanctions filed by Defendants Blue Elephant Holdings, LLC, and Donald Morse and the Motion (#47) for Partial Summary Judgment on Liability filed by Plaintiff Cheryl Aichele.

         For the reasons that follow, the Court GRANTS in part and DENIES in part Defendants' Motion for Summary Judgment, DENIES Defendants' Motion for Discovery Sanctions, and DENIES Plaintiff's Motion for Partial Summary Judgment.


         The following facts are taken from the parties' Joint Statement of Agreed Facts (#30) and summary-judgment materials and are undisputed unless otherwise noted.

         Blue Elephant is an Oregon corporation that owns and operates a marijuana dispensary in Southwest Portland, which does business as “The Human Collective II” or “The Human Collective.” Morse is an owner of Blue Elephant and serves as the Managing Director of the corporation. As Managing Director Morse is authorized to make decisions regarding the day-to-day management of the dispensary's operations.

         From November 10, 2015, until March 2016 Plaintiff was employed by Blue Elephant as a part-time “bud tender.” On January 28, 2016, Ric Leonetti, the manager of the store where Plaintiff worked, held a staff meeting at which he distributed and discussed Blue Elephant's new Employee Handbook. Plaintiff signed an acknowledgment of receipt of the Employee Handbook on that date.

         In early February 2016 Plaintiff complained to Morse and/or Leonetti about alleged black mold on a vent in the restroom. Plaintiff also sent an instant message to Morse regarding this issue, but Morse denies he received any instant message at that time. Morse asserts he later heard about Plaintiff's mold complaint from Leonetti.

         Also in February 2016 Plaintiff alleges she made approximately six oral complaints to Morse and/or Leonetti about internal doors being left unlocked or open, the door chime being deactivated, and the safe being left open.

         On the afternoon of February 26, 2016, while Plaintiff and numerous other employees and customers were present, a customer walked behind the sales counter and attempted to open the door to the apothecary where most of the cannabis product is kept. While another employee helped the customer, Plaintiff went to Morse's office, told him that she did not feel safe, and asked Morse to handle the situation. Plaintiff also told Morse that she thought it would be nice if he hired an armed security guard.

         On February 29, 2016, and March 1, 2016, Morse spoke with attorney Scott Snyder regarding Plaintiff's complaint that she did not feel safe after the customer walked behind the counter. Morse asked Snyder for legal advice regarding his options with respect to Plaintiff. Snyder advised Morse that Oregon is an at-will employment state and that the company could and should terminate Plaintiff's employment.

         On March 4, 2016, at approximately 10:30 a.m. before the store opened where Plaintiff worked, a music video was streaming to a TV monitor in the dispensary showroom. Plaintiff and four other employees (Cody Brown, Nick Harris, Eliav Cohen, and J. Cody Robertson) were working in the showroom.

         The video is a total of seven minutes and 34 seconds and consists of two parts. The first part depicts a party scene, and the second part is more sexually graphic. Shortly after the second half of the video began to play, Plaintiff objected to the video being played and demanded that her co-workers turn it off. The parties disagree as to the words used and the manner in which Plaintiff stated her objection. As soon as Plaintiff objected to the video, one of her co-workers rushed to the computer controls to turn it off. Blue Elephant's security camera footage shows the video was turned off in less than 30 seconds after Plaintiff complained.

         After the video was turned off, Plaintiff continued yelling at Brown and used profanity. Brown was considered the assistant manager of the store. Brown became upset, also yelled and used profanity, and told Plaintiff to leave work. Plaintiff did not leave.

         Brown called Leonetti, who was not at work on the day of this incident, and told him what had happened. Leonetti asked to speak with Plaintiff. In graphic language Plaintiff told Leonetti that she was offended by the video.

         At 10:45 a.m. that same day Leonetti sent a text message to Brown, Cohen, and Morse with the following instructions: “ONLY THE MENU PLAYS ON THE TV SCREEN. IMMEDIATELY STOP PLAYING ANYTHING THE [sic] COULD BE OFFENSIVE TO ANYONE.” Emphasis in original.

         Plaintiff worked the remainder of her shift on March 4, 2016.

         Later in the afternoon on March 4, 2016, Morse again called Snyder to inform him that Plaintiff had complained about sexual comments, conversations, music, and music videos being displayed in the dispensary. Morse told Snyder about the incident that had occurred with the video that morning, including Plaintiff's response and behavior during and after the incident. Morse asked Snyder for legal advice and reassurance as to what he should do with respect to Plaintiff. Snyder reiterated his advice to Morse to terminate Plaintiff.

         On March 4, 2016, at 4:19 p.m. Morse sent the following text message to Leonetti: “I have been advised by our attorney to terminate Cheryls [sic] employment. If you care to discuss it please call me.” Plaintiff worked on March 5, 2016, but she was not scheduled to work on March 6, 2016.

         On March 7, 2016, Plaintiff arrived at work at approximately 9:35 a.m., immediately handed an envelope to Leonetti, and told him that it was her “incident report and formal sexual harassment complaint.” The written complaint set out her safety concerns arising from the customer walking behind the dispensary counter on February 26, 2016, and alleged sexual harassment, a hostile work environment, and discriminatory conduct.

         Leonetti took the papers to his office and began to review them. After a few minutes Leonetti called Plaintiff into his office. There is a dispute as to the details of this conversation, but the parties agree Leonetti told Plaintiff to go home for the day. The parties also agree Leonetti was the sole decision-maker to send Plaintiff home from work on the morning of March 7, 2016.

         On March 7, 2016, at 11:22 a.m. after Plaintiff had gone home, she sent an email titled “Formal Sexual harassment & Hostile Work Environment Complaint #2” to Leonetti and others, including Morse. Plaintiff reiterated her earlier complaints; stated Leonetti had retaliated against her by sending her home that morning after she submitted her written complaints; and asked that Leonetti, Brown, Harris, and Cohen immediately resign or be terminated. Plaintiff also asked for her email to be forwarded to Morse.

         After Morse reviewed Plaintiff's written incident reports and complaints, he called Snyder to update him on the situation and again asked for his advice on how to proceed. Leonetti was present and heard at least part of the telephone call. Morse told Snyder about Plaintiff's written complaints and asked Snyder whether that changed Snyder's advice in any way. Snyder again told Morse that Oregon is an “at-will employment state” and advised Morse to terminate Plaintiff.

         On March 7, 2016, at 12:47 p.m. Morse called Plaintiff and left her a voicemail asking to talk with her about her complaints and what had transpired that morning. At 5:18 p.m. Plaintiff returned Morse's call and left him a voicemail. At 5:40 p.m. Morse returned Plaintiff's call. Plaintiff recorded the telephone call with Morse. During the conversation Morse terminated Plaintiff's employment.

         Aside from Snyder providing legal advice and recommending termination, the parties agree Morse was the sole decision-maker and that he made the decision to terminate Plaintiff's employment on March 7, 2016. The parties also agree Morse was acting within the course and scope of his authority as an owner and Managing Director of Blue Elephant when he terminated Plaintiff's employment, and, as the Managing Director of Blue Elephant, Morse had the authority to make the decision to terminate Plaintiff without first consulting the Board of Directors or any other owner or manager of Blue Elephant.

         On March 8, 2016, at 2:59 p.m. after speaking with a different attorney, Morse sent an email to Plaintiff and rescinded her termination. Morse placed Plaintiff on paid administrative leave pending an investigation of her complaints.

         On March 8 and 9, 2016, Blue Elephant issued written disciplinary actions to Brown, Harris, Cohen, and Leonetti regarding the video incident and Plaintiff's complaints.

         On March 10, 2016, Plaintiff sent an email to Morse and attached copies of all of her written incident reports and complaints and provided a link to the song lyrics and a link to the video.

         On March 18, 2016, Defendants' attorney sent an email to Plaintiff's attorney and notified him that the investigation was complete and that Plaintiff would be placed back on the work schedule for shifts beginning March 22, 2016, at 12:30 p.m.

         Plaintiff did not return to work on March 22, 2016.

         On March 22, 2016, Defendants' attorney sent an email to Plaintiff's attorney and described the remedial efforts that Blue Elephant had taken in response to Plaintiff's complaints and notified him that Plaintiff was on unpaid administrative leave effective that date.

         On March 23, 2016, Morse sent Plaintiff her final paycheck in which she was paid for her actual hours worked during the week of March 1-5, 2016, and her average of 20 hours per week for the weeks of March 6-12 and March 13-19, 2016. Plaintiff did not return to work after March 22, 2016.

         Throughout her employment with Blue Elephant Plaintiff earned $10 per hour and worked an average of 20 hours per week. The parties agree Plaintiff did not suffer any economic loss or damages between March 7, 2016, and March 22, 2016. Moreover, Plaintiff does not seek recovery of any economic damages other than lost wages.

         The parties agree after Plaintiff's employment with Blue Elephant ended in March 2016, Plaintiff did not seek employment until May 31, 2016, and she applied for only eight jobs between that date and December 4, 2016.

         On May 17, 2016, Plaintiff filed a charge of unlawful employment practices with the Oregon Bureau of Labor and Industries, Civil Rights Division (BOLI), and the Equal Employment Opportunity Commission (EEOC).

         On October 21, 2016, Plaintiff filed a complaint in Multnomah County Circuit Court against Defendants. Plaintiff alleged claims for retaliation pursuant to 42 U.S.C. § 2000e-3(a) and Oregon Revised Statutes §§ 659A.030(1)(f) and 654.053(5) and claims for retaliation for whistleblowing pursuant to Oregon Revised Statutes § 659A.199.

         On November 22, 2016, Defendants filed a Notice of Removal in this Court.


         Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Washington Mut. Ins. v. United States, 636 F.3d 1207, 1216 (9th Cir. 2011). See also Fed. R. Civ. P. 56(a). The moving party must show the absence of a dispute as to a material fact. Rivera v. Philip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005). In response to a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings and show there is a genuine dispute as to a material fact for trial. Id. "This burden is not a light one . . . . The non-moving party must do more than show there is some 'metaphysical doubt' as to the material facts at issue." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citation omitted).

         A dispute as to a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002)(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The court must draw all reasonable inferences in favor of the nonmoving party. Sluimer v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010). "Summary judgment cannot be granted where contrary inferences may be drawn from the evidence as to material issues." Easter v. Am. W. Fin., 381 F.3d 948, 957 (9th Cir. 2004)(citation omitted). A “mere disagreement or bald assertion” that a genuine dispute as to a material fact exists “will not preclude the grant of summary judgment.” Deering v. Lassen Cmty. Coll. Dist., No. 2:07-CV-1521-JAM-DAD, 2011 WL 202797, at *2 (E.D. Cal., Jan. 20, 2011) (citing Harper v. Wallingford, 877 F.2d 728, 731 (9th Cir. 1989)). When the nonmoving party's claims are factually implausible, that party must "come forward with more persuasive evidence than otherwise would be necessary." LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009)(citation omitted).

         The substantive law governing a claim or a defense determines whether a fact is material. Miller v. Glenn MillerProd., Inc., 454 F.3d 975, 987 (9th Cir. 2006). If the resolution of a factual dispute would not affect the ...

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