In today’s technology-centered workplace, employees and employers have more options than ever before on how to communicate.  Calling, video-conferencing, and even texting amongst co-workers has become the norm.  And with the recent shift towards remote and hybrid work situations, many of these communications are happening from the comfort of employees’ homes.  With the lines between the home and workplace blurring, analyzing responsibility when misconduct occurs can be tricky.  Luckily, in the recent case of Atalla v. Rite Aid, the Court of Appeal made clear employers are not liable under harassment law for employees’ off-duty actions completely unrelated to work, even between a supervisor and subordinate.

Hanin Atalla and Erik Lund met in fall of 2017, when Atalla shadowed Lund at Rite Aid during her pharmacy school rotations.  When Atalla’s rotation at Rite Aid ended, she attended a celebratory dinner with Lund and his wife and the two kept in close touch.  Atalla later began work at Rite Aid as a graduate intern and then hourly staff pharmacist; Lund was her supervisor.  Atalla and Lund became close friends, celebrated a Friendsgiving, joked regularly, and frequently went to lunch.  They frequently texted on their personal cell phones about a range of personal matters, including travel and vacations, exercise, food, weight loss, restaurants and getting together for meals, family and relatives, birthdays, fashion, drinking and alcohol, work issues, their respective spouses, pets, and social media.  They also dined together as couples with their spouses, including once for Atalla’s birthday.

On a Friday night approximately one month after Atalla’s birthday, while Atalla was at home and Lund was at a hotel for personal business Lund began texting Atalla on their personal cell phones about the alcohol he was preparing to drink at the hotel.  Shortly thereafter, Lund texted her a “Live Photo” of him masturbating, followed by a text that said, “I am so drunk right now.”  He then texted, “Meant to send to wifey”, to which Atalla responded, “It’s ok, I deleted it before I end up in a divorce.”  Lund then sent several more texts stating, “Both of us” and “Race to the bottom” accompanied by a photo of his penis.  Atalla texted, “Erik, stop please,” to which he replied, “You are right.”  The exchange ended.  The following Monday, Atalla called in sick to work.  A few days later, Atalla’s counsel sent a letter to Rite Aid asserting a claim of sexual harassment.  When questioned by the Human Resources Leader, Lund admitted to sending the photos and videos Atalla mentioned in her letter.

Rite Aid promptly fired Lund and Atalla said she would not be returning to work.  She filed a claim for violation of the Fair Employment and Housing Act (FEHA) for sexual harassment, failure to prevent sexual harassment, and hostile work environment, among other things.  The trial court granted Rite Aid’s motion for summary judgment, and Atalla appealed.

The California Court of Appeal affirmed the trial court because Atalla had not raised a triable issue of material fact that Lund was acting in the capacity of a supervisor during the text exchange.  Rather, the Court agreed with the trial court and Rite Aid that Lund and Atalla had an extensive texting relationship that predated her employment, the exchange occurred outside the workplace and outside of work hours, and the exchange arose from their friendship (although it also ended it).  Moreover, Atalla admitted that she and Lund were friends before she worked at Rite Aid and their friendship was not connected to her work at Rite Aid.

Because Atalla could not make the fundamental showing that Lund was acting in a supervisorial capacity, the Court affirmed the trial court’s ruling and dismissed the case against Rite Aid.

Employers can take relief in this type of outcome, however, it highlights the importance of maintaining proper training and up-to-date policies on sexual harassment and fraternization in the workplace.  If Lund had been acting in his capacity as a supervisor, the employer could have been strictly liable for his conduct.  Also, Lund could have been personally liable for damages.  LCW offers comprehensive sexual harassment training tailored for both supervisors and employees that meet the minimum FEHA requirements.

Atalla v. Rite Aid (2023 S.O.S. 992):