Atalla v. Rite Aid Corp., 2023 WL 2521909 (Cal. Ct. App. 2023)

Hanin Atalla and Erik Lund had a social relationship and became “close friends” before Atalla began working at Rite Aid where Lund worked as a district manager/district leader. Atalla and her husband socialized with Lund and his wife, and Atalla and Lund exchanged hundreds of texts; joked with one another in those texts; texted about personal matters; and sent multimedia messages to one another. They also frequently met for lunch and went out for coffee together. Late one Friday night after meeting with his “wine group,” Lund sent Atalla a “Live Photo” of himself masturbating, followed shortly thereafter by a photo of his penis. Lund texted that he was “so drunk right now” and that he had “meant to send to wifey.” Lund texted an apology to Atalla the next day to which she did not respond. Within a few days, Atalla’s counsel sent a letter to Rite Aid asserting a claim of sexual harassment; following an investigation, Lund’s employment was terminated. Although Rite Aid assured Atalla that she was welcome to return to work (and notified her of Lund’s termination), she refused to come back. The trial court granted summary judgment to Rite Aid, and the Court of Appeal affirmed, holding that the evidence did not support an inference that “the text exchange culminating in the inappropriate photos was work-related in that Lund was acting in his capacity as a supervisor, and the conduct was in turn properly imputable to Rite Aid.” The Court also held there was no constructive termination of Atalla’s employment because “Rite Aid immediately took action, terminated Lund, and invited plaintiff back to work” (quoting the trial court’s order).