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Estep v. Forever 21 Retail, Inc.

United States District Court, D. Oregon

November 13, 2018

JONATHAN ESTEP, an individual, Plaintiff,
FOREVER 21 RETAIL, INC., a foreign business corporation, doing business as FOREVER 21, Defendant.



         Jonathan Estep (“Estep”) brings this action against his former employer, Forever 21 Retail, Inc. (“Forever 21”), alleging a single claim for disability discrimination pursuant to Oregon Revised Statute (“ORS”) § 659A.112, arising from Forever 21's termination of Estep's employment on June 30, 2016.[1] (ECF No. 1.)

         Pending are Estep's Motion to Amend Schedule to Allow Leave to File an Amended Complaint (“Leave to Amend”) (ECF No. 17), to include additional factual allegations and a prayer for punitive damages, and Forever 21's Motion for Summary Judgment (ECF No. 20). For the reasons that follow, the Court grants Estep's Motion for Leave to Amend, and denies Forever 21's Motion for Summary Judgment.


         In July 2012, Forever 21 hired Estep as a co-store manager in Fresno, California. (Jonathan Estep Decl. ¶ 4, June 6, 2018.) Forever 21 promoted Estep to store manager in 2013, and to district manager of the Washington State district in 2014. (Estep Decl. ¶ 5; Jennifer Warberg Decl. Ex. 1 (Jonathan Estep Dep. 37:12-14, Apr. 24, 2018 (hereinafter “Estep Dep.”)), May 25, 2018.) In November 2015, Forever 21 temporarily assigned Estep to oversee additional stores in the Sacramento district. (Estep Dep. 41:16-21.) In December 2015, Jane Ha (“Ha”), Vice President Store Operations, assumed responsibility for all domestic operations and, in so doing, became Estep's manager. (Warberg Decl. Ex. 2 (Jane Ha Dep. 11:8-12:13, Apr. 25, 2018 (hereinafter “Ha Dep.”))).

         In 2015, Forever 21 began an intensive review of its United States store operations due to overall declining domestic performance. (Ha Dep. 141:8-17; Warberg Decl. Ex. 3 (Karin Durham Dep. 29:14-30:1, Apr. 24, 2018 (hereinafter “Durham Dep.”))). As part of that review, senior management began taking a closer look at underperforming management at the district level, including Estep. (Ha Dep. 35:18-36:8, 143:10-144:3.) In addition, near the end of 2015, Forever 21's founder and Chief Executive Officer, Do Won Chang (“CEO Chang”), became more involved in day-to-day operations. (Estep Dep. 238:1-19.)

         CEO Chang “identified a hundred bottom stores” for his senior leadership team to visit between November 9 and November 20, 2015. (Ha Dep. 143:10-144:3.) Although Ha did not visit any of Estep's stores, she concluded that the condition of Estep's Pine Street store was “far below company expectation.” (Ha Dep. 33:11-18; see also id. at 35:18-22 (“I was concerned when I viewed the photos in November during the executive meeting.”); id. at 100:15-25) (confirming that the condition of the Pine Street store “was the worst [she'd] seen in 18 years”); see alsoEstep Dep. 97:14-18 (acknowledging that the Alderwood store was “not to [company] standard”))).

         In late 2015, Ha's assessment of district level operations revealed other examples of Estep's alleged substandard performance. In particular, by December 2015, Forever 21 identified Estep as one of fifteen “Bottom Performers” among forty-plus district managers. (Estep Dep. Ex. 9 (stating that Estep was “[c]hallenged with holding others accountable. Stores are operationally/visually challenged. Does not exude leadership/presence. Needs support with performance management.”)).

         On December 14, 2015, Ha sent an email to the district managers of the bottom one hundred stores requesting photos of various areas within the store. (Estep Dep. Ex 7.) Estep was the district manager for six of the bottom one hundred stores. (Id.; Estep Dep. 108:18-110:24.)

         When asked about receiving the December 14 email, Estep stated:

Q. What did you do, if anything, in response to receiving this email?
A. I can't remember, quite honestly. By December 14th, I was extremely sick. I'm not quite sure of what actions.
. . . .
Q. Did you ever communicate to Ms. Ha that any challenges that may have been occurring in your district were a result of illness?
A. I believe I -- if I remember correctly, I didn't specifically state that it was - the challenges we spoke of with Ms. Ha were kind of bigger picture of product support, things that we needed from the previous regional team that we haven't been delivered.
So it was more large scale, not personally -- it was more large-level conversation, not one-on-one of what personally I needed for the market.
Q. So you never said to her in person or by phone or by e- mail, “Hey, there are challenges in my district, and part of the reason for that is I'm ill”?
A. Not at that time. I did e-mail her that I was sick. But at the time, I was the only DM. I was the only person in that market besides Jesus because Casie was out. I was supporting Sacramento.
So, for me, I just was power -- trying to power through it, the sickness, because there was really nobody to turn to at that time. Because I hadn't had a real conversation with Jane Ha.
The regional team who were my support team were all gone. So there was -- felt at that time no one to really turn to. And there -- and so I never had that conversation.

(Estep Dep. 110:12-16, 123:9-124:12.)

         On December 21, 2015, Regional Visual Manager Lisa Castro (“Castro”) expressed concern to Ha about the “NW” region “as a whole” because “stores are doing their own thing.” (Estep Dep. Ex. 8.) Around this same time, Chief Marketing Officer Linda Chang asked Ha why a handful of stores, including two Estep managed, were still “not able to pick up.” (Estep Dep. Ex. 10.)

         According to Forever 21, based on the executive visits and subsequent reports, Ha decided to terminate Estep's employment:

Q. And at what time period were you looking at for the stores in his district that were causing you concern?
A. Like I said, it started from the November executive visit.
The -- before the executive visit happened, Mr. Chang identified a hundred bottom stores as stores that we needed to visit. So that's the starting from the CEO identifying Jonathan Estep's store amongst the other rest of the stores as a concern store. So we needed to go out and determine what is happening, and that's the starting point of -- of seeing the stores. As I said, the -- the presentation and condition was not anywhere near where it needs to be. That's where the concern came from. That's why you will see Jonathan Estep's name on Linda's e-mails a lot. She sees the photos that I'm looking at. She's calling out for reports to look at in different angle and to see if -- you know, what we can do to improve the business on these districts that were struggling.
Q. And that's why you agreed to terminate him?
A. I think -- to protect the company, to have somebody that could own the business, I think that was the best decision.

(Ha Dep. 143:10-144:7.) However, Ha did not terminate Estep in December 2015:

Q. Okay. Do you recall reading these observations at the top of the page about Mr. Estep?
A. Yes.
Q. And at the time that you read this, did you do anything in response to these observations?
A. No.
Q. Why not?
A. Taking over U.S. at that time with the 50-some-odd district managers, I had to assess where I'm going to address with priority. So, at that time, I did not do anything.

         Q. So those comments don't make [Plaintiff] a high priority?

         A. There's a high priority amongst this bottom ...

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