August 7, 2008 Via Federal ExpressMs. Bess Y. McClainDepartment of Fair Employment and Housing1515 Clay Street, Suite 701Oakland, CA 94612Fax: 510-622-2952RE: Priest v. Peninsula Harley-Davidson, Inc. DFEH File No. E200708A1130-00-ase/37AA804292Dear Ms. McClain:We represent Peninsula Harley-Davidson, Inc. (PHD) and take this opportunity torespond to the charge of gender and age discrimination filed by Jeffrey Priest onMay 22, 2008.Mr. Priest bases his claim on PHD’s October 2007 decision to eliminate the positionof Service Manager and PHD’s subsequent March 2008 decision to reinstate thisposition in a modified format and to give this title to another employee, a youngerwoman. As will be demonstrated below, there is no merit to Mr. Priest’sdiscrimination claims.Peninsula Harley Davidson (“PHD”)Located in Redwood City, California, PHD is a retail seller and service provider for HarleyDavidson and Buell motorcycles. PHD is owned by Chuck Cooke and Christie Loftus.Cooke is the President, and Loftus is the general manager of the dealership.PHD’S Policies Against DiscriminationPHD is an equal opportunity employer and is committed to maintaining a workplace freeof discrimination and harassment. Toward this end, PHD maintains express policiesprohibiting discrimination and harassment based on age and sex, among other protectedcategories. These policies include a formal complaint procedure, which incorporatesPHD’s commitment to investigate all allegations of discrimination or harassment, andemployees are encouraged to report incidents of which they have knowledge. (See Ex.__, Employee Handbook, pg. __)
Gender and Age Composition of PHD Workforce in 2007Over the course of 2007, PHD employed a total of thirty-five people. Of these thirty-five,at least twenty-two were over the age of forty and twenty-two were men. In particular,PHD employed nine persons in the Parts Department. Of these nine, at least five wereover the age of 40 and seven of the nine were men. PHD employed 13 persons in theService Department. Of these 13, at least 9 were over the age of 40 and twelve of thethirteen were men. PHD employed seven persons in the Sales Department. Of theseseven, at least five of the seven were over the age of 40 and three of the seven weremen.Following the elimination of Jeff Priest’s position in October 2007, of the six remainingservice department employees, five were older than Priest and were makingapproximately the same in salary.Employment BackgroundJeff Priest was hired as an at-will employee on or about July 11, 1995. During hisemployment with PHD, Priest signed at least two acknowledgments of his at-will status.(See Exhibit ___, 6/16/96 signed acknowledgment; and Exhibit ___, 10/10/02 signedacknowledgment.)Mr. Priest began his employment with PHD as a service technician. On February 14,1997, he was promoted to the position of Service Manager. Mr. Priest receivedincreases in pay throughout his employment. On July 11, 2005, his rate of pay increasedto $25.00 per hour where it remained for the remainder of his employment with PHD.Beginning in or around 2001, Priest began expressing his desire to make a change in hislife. He announced that he was going to resign and return to Ohio to care for his mother.PHD encouraged Priest to take some time off and reconsider his decision. Priest did soand decided to stay at PHD.This pattern of wanting to quit and then reconsidering continued each year. Priestappeared to be less and less satisfied with his job, would remain in his office for hoursand less frequently interacted with both coworkers and customers. During this time,Priest admitted that he knew that he was not doing a very good job and would leave ifPHD decided to go in a different direction.Priest’s position was eliminated on October 26, 2007.2007 Financial Struggles of PHDLikely the result of increasingly difficult economic times in the Bay area, PHD was losingmoney on an almost monthly basis in 2007. Profit from busy summer months wasusually enough to carry the business through slower winters, but this was not the case in2007.In response to the continued monthly losses and in order to survive the upcoming winter,PHD owners Cooke and Loftus began to implement a series of cost saving measures inOctober. In addition to reducing staffing, PHD owners also asked the landlord for rentrelief, discontinued janitorial services, took personal pay cuts of approximately 15% andultimately put the business up for sale.
The reality of PHD’s 2007/2008 financial situation is further evidenced by its placementby Harley-Davidson Motor Company (“HDMC”) on a “Dealer Performance Campaign.”Under this program, HDMC strictly monitors and evaluates the continuing performance ofthe dealership. PHD received its first letter giving notice of its placement in this programin November 2007 and has continued to receive letters regarding its continued placementin 2008. (See Exhibits __, Letter dated Nov. 8, 2007; Exhibit __, Letter dated March 3,2008; Exhibit __, Letter dated June 16, 2008.)PHD’s Elimination of Position of Service ManagerIn furtherance of their decision to cut back on personnel to reduce overhead, Cooke andLoftus reviewed the employment rosters, analyzing both a person’s salary as well as hisor her position and contribution to the business. Based on this analysis, the ownersconcluded that one of the positions that could be eliminated was that of Service Manager,Jeff Priest’s position. Four other employees were also laid off at this time.On October 20, 2007, Loftus notified Priest that his position was going to be eliminateddue to the dealership’s financial situation. She explained to him that she was not going tobe hiring a replacement Service Manager at that time and that Loftus would be steppingin as acting manager for the foreseeable future.Priest seemed to accept this news well and stated that he was aware of PHD’s financialsituation and had been preparing for this possibility for a while. He added that he alreadyhad his resume on internet hiring sites, was following possible job leads and might takesteps to fulfill a long term desire to move back to Ohio. Priest’s last day of work wasOctober 26, 2007, and PHD threw a going away party in his honor.His wife, Sue Newman, the Finance and Insurance Manager at PHD, submitted her letterof resignation on November 7, 2007. Her last day of work was November 23, 2007.Priest and Newman moved to Ohio shortly after their departure from PHD.Promotion of Andrea VenemaLoftus continued to perform the role of acting service manager until March 2008. Duringthis time, she was supported by Assistant Service Manager Andrea Venema and co-owner Cooke. In March 2008, the title of “Service Manager” was passed on to Venema.Her “promotion” had nothing to do with her age or gender. In fact, upon his departure,Priest suggested that PHD use Venema as his replacement until the company decidedhow to proceed, given its current financial state.While Venema’s new title was “Service Manager,” her duties and responsibilities did notmirror those of Priest. Cooke and Loftus decided that, in this position, Venema wouldfunction in dual roles as both Service Advisor and Manager. Loftus would continue toperform much of the financial reporting that was previously the responsibility of the“Service Manager” and Cooke would continue to provide support to help Venema run thedepartment. Venema accepted these additional responsibilities without pay increase.Prior to her promotion, she was being paid $20/hr, and she continues to be paid at thisrate.
Cooke and Loftus continue to see Venema’s position as a temporary solution to their longterm business need for a more highly trained and competent service manager. However,at this time, with assistance from Cooke and Loftus, Venema is able and willing toperform many of the duties previously handled by the Service Manager/Priest and doesso at the rate of $20/hour. Given PHD’s continuing financial struggles, the presentarrangement satisfies the immediate needs of the company.////////////ConclusionJeff Priest has asserted claims of discrimination that are entirely without merit. It isrespectfully requested that the DFEH issue a “no cause” finding, close its files andissue Mr. Priest his “right to sue” notification.Very truly yours,CASAS RILEY & SIMONIAN, LLPGregory C. Simoniangsimonian@legalteam.comGCS/mc