Heguy v. Unleaded Software, Inc.

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER

          SCOTT T. VARHOLAK MAGISTRATE JUDGE

         This matter came before the Court for trial on May 6-9, 2019. The parties have consented to proceed before this Court for all proceedings, including the entry of final judgment, pursuant to 28 U.S.C. § 636(c) and D.C.COLO.LCivR 72.2. [##15, 16] At the conclusion of the trial, the Court took the matter under advisement. Having fully reviewed the evidence presented, applicable law and arguments of counsel, the Court now enters its Findings of Fact, Conclusions of Law and Order.

         I. PROCEDURAL BACKGROUND

         Plaintiff initiated the instant action on October 4, 2017. [#1] Plaintiff's Amended Complaint asserts four causes of action related to Plaintiff's employment and ultimate termination from Defendant Unleaded Software, Inc. (“Unleaded”). [#30] Claims One and Three allege discrimination by Unleaded on the basis of sex and pregnancy, in violation of Title VII (Claim One) and Colorado Revised Statute § 24-34-402 (Claim Three). [Id. at 8-9, 10-11] Claim Two alleges retaliation by Unleaded in violation of Title VII. [Id. at 9-10] Claim Four alleges aiding and abetting discrimination by Defendant Nancy Clark, in violation of Colorado Revised Statute § 24-34-402.^[1] [Id. at 11-12] Plaintiff's Amended Complaint seeks back and front pay, lost employment benefits, compensatory and punitive damages, attorneys' fees and costs, and pre-judgment and post-judgment interest, among other relief. [Id. at 12-13]

         On April 4, 2019, the parties filed a Stipulation to Withdraw Jury Demand and Try Matter to Court. [#46] A bench trial commenced on May 6, 2019, and concluded on May 9. [##54, 56-57, 59] At the conclusion of trial, the Court took the matter under advisement. [#59]

         II. FINDINGS OF FACT

         Unleaded is a website design company created by Jarod Clark in the mid-1990s. By 2010, Unleaded had approximately thirty employees. At all times relevant to the lawsuit, three individuals held an ownership interest in Unleaded-Jarod Clark, who held the largest interest; Nancy Clark, who is Jarod's mother^[2]; and Andrew Klein.

         On August 4, 2010, Unleaded hired Plaintiff to work as a project manager and agreed to pay her a $40, 000 salary. Plaintiff has an Associate's Degree from Platt College. As a condition of her employment, Plaintiff signed a non-compete agreement that limited her ability to solicit Unleaded customers for a period of eighteen months following her termination. [Ex. 11]

         Plaintiff was initially very successful at Unleaded. After a few months, she received a $10, 000 raise. She was then promoted to Project Manager Director, and her base salary was raised to $57, 000 per year. She also began receiving commissions. By 2014, as a result of her base salary and commissions, her annual gross income from Unleaded was approximately $107, 000. By all accounts, from the time she was hired through July 2014, Plaintiff was a valued Unleaded employee. Both Jarod and Nancy praised Plaintiff's work.

         At the end of 2013, rather than requesting a raise, Plaintiff asked to change her work schedule. Specifically, she asked to work a four-day, ten-hour per day, workweek. She would not work on Wednesdays, though she indicated that she would be available on that day. Nancy agreed to the change.^[3]

         Despite the change in schedule, Plaintiff was still putting in long hours and felt stressed and overwhelmed. As a result, at some point between late May and early July 2014, Plaintiff approached Unleaded's ownership about working part-time. She met with Nancy who was open to the idea and asked Plaintiff to put together a proposal.

         On July 21, 2014, Nancy sent Plaintiff an email with an attached proposal for the part-time position. [Ex. M] This began a series of emails between Plaintiff and Nancy concerning the details for the part-time position.^[4] [Exs. N-S] Among the issues discussed were the compensation structure, the number of hours worked, and whether Plaintiff would retain the title of Project Manager Director or simply become a project manager. Plaintiff also wanted Unleaded to transition the job of assigning tasks and projects to somebody else. [Ex. S at Bates U.S. 1439-40] Plaintiff proposed her own version of the part-time job description on July 28, 2014. [Id. at 1439-40, 1261-70] In an August 11, 2014 email, Plaintiff stated that she was hoping to have the part-time position finalized by the end of the week, so that she could begin at the start of the next pay period. [Id. at Bates U.S. 1439]

         On August 18, 2014, Nancy sent Plaintiff an email setting forth a revised proposal for the part-time position. [Ex. X at Bates U.S. 1421] In it, Nancy proposed a $35 per hour base salary, limited to 24 hours per week. [Id.] Travel to Rite Aid's corporate headquarters, located in Pennsylvania, however, would not be included as part of that hourly compensation. [Id.] Rite Aid was one Unleaded's largest clients. Plaintiff responded later that day that she “w[ould] need to be compensated for all hours worked.” [Id. at Bates U.S. 1420]

         Nancy responded a few hours later. In an email to Plaintiff, she stated that what Plaintiff “brought up with all hours being compensated is essentially the issue [Nancy] feared-[Plaintiff] taking a managerial role and overlying it with the ‘Taco Bell' hourly filter.” [Id.] Nancy further indicated that while Unleaded was willing to accommodate Plaintiff's request for health insurance and vacation, she did not “see that [Unleaded] can fill a managerial position on a part time compensation package” and that this problem “[wa]s a problem [she] c[ouldn't] overcome.” [Id.] As a result, she indicated that she was “back to either or in that it's either a [project manager] role part-time or a [Project Manager Director] role full-time.” [Id.] Plaintiff and Nancy exchanged two more emails later that day, both indicating that there had been a “disconnect” between them in their previous discussions about the part-time position. [Id. at Bates U.S. 1419]

         On August 25, 2014, Plaintiff sent an email to Nancy, Jarod, and Mr. Klein, advising them for the first time that she was pregnant and expecting in April 2015. [Ex. A-21] She stated that Unleaded's handbook did not have details on maternity leave, and she inquired how leave would work. [Id.] In response, all three Unleaded owners sent congratulatory emails. [Exs. A-22-A-24]

         The next day, Nancy sent Plaintiff an email explaining that she had spent the last week meeting with Jarod and different division managers about the part-time position. [Ex. Y at Bates U.S. 1413] The email then detailed a revised proposal. [Id.] As part of the proposal, Plaintiff would continue to oversee project managers, but she would no longer assign projects for the overall group. [Id.] She would continue to manage the projects for the key clients that Plaintiff had previously requested. [Id.] She would work 24 hours per week. [Id. at Bates U.S. 1414] Her base salary would be “$3360/month (this is $35/hour, 24 hours a week).”^[5] [Id.] Plaintiff would also receive commissions for her project manager work, upsells, and sales to new customers. [Id.] She would also have health insurance and six national holidays. [Id.]

         Plaintiff responded to Nancy and Jarod Clark with an email stating that they “seem[ed] [to be] aligning on the role but they [we]re still not aligning on the compensation.” [Ex Z] Nancy responded with an email asking Plaintiff to explain what was not aligned. [Ex A-1] A series of email exchanges ensued. [Exs. A-2-A-11] Plaintiff questioned whether she would receive vacation pay, paid personal leave, and paid holidays. [Ex. A-4] Plaintiff also explained that she thought the salary calculation was incorrect. [Id.] Plaintiff explained that “$35 x 24 hours = $840 x 52 weeks =$43680 / 12 months = $3640.” [Id.] Plaintiff and Nancy apparently ultimately agreed on the leave policy for the new position, but did not further discuss the base salary calculations. [Exs. A-5-A-12]

         On September 4, 2014, Plaintiff sent an email to Nancy and Jarod stating that she believed the move to part-time employment as discussed between the parties “would be a good transition.” [Ex. A-12] She further indicated that she would like to start on September 15, the beginning of the next pay period. [Id.] She then asked Nancy to send the paperwork so that she could “look it over for a final signature.” [Id.]

         Nancy responded with an email stating that she would be sending the paperwork over that morning. [Ex. A-13] She further indicated that they had started the part-time position two days earlier, because a start date at the beginning of the month eliminates confusion.^[6] [Id.] When Plaintiff responded stating that she did not want the part-time position to start until September 15, Nancy replied that Plaintiff was “not in charge of th[e] time decision.” [Ex. A-14]

         A series of terse emails ensued. [Exs. A-15-A-17] Plaintiff said that she was “not sure why every step of this [negotiation process] [wa]s turning into a battle.” [Ex. A-15] Nancy responded by agreeing that the “battle part [was] nonsense” and accused Plaintiff of “attempting to manage the business in a manner that [wa]s outside of [her] purview.” [Ex. A-16] Plaintiff replied that Nancy had been showing “very obvious hostility” since July when the part-time negotiation process began. [Ex. A-17 at Bates U.S. 1332]

         Plaintiff reviewed the proposed terms for the part-time position, which included the September 2 start date, and continued to reflect a base salary of $3, 360 per month. [See Id. at Bates U.S. 1331] Plaintiff emailed Nancy, stating that she could not “sign the[] documents, ” because the salary was wrong and the parties could not agree on the start date. [Id.]

         A few hours later, Plaintiff met with Nancy's daughter, Shaun Clark, on September 4, 2014. Shaun is a lawyer by training, though she was not licensed during the events in question. Nonetheless, she would perform some in-house lawyering services for Unleaded. During the meeting, Plaintiff explained that the proposed compensation was improperly calculated and that she could not start the new position on a day that had already passed. As a result, she declined the part-time position.

         A few hours after that meeting, Shaun sent Plaintiff an email stating that she was “glad [the parties] got everything worked out” during the meeting. [Ex. A-18 at Bates U.S. 0433] In that email, Shaun informed Plaintiff of three changes that would be made to the full-time Project Manager Director position, which Plaintiff would be retaining. [Id.] First, Plaintiff would no longer be in charge of reviewing Active Collab, a project management software. [Id.] Second, Plaintiff would no longer need to manage project assignments. [Id.] Plaintiff testified that these first two changes were changes that she desired.

         Finally, Shaun's email stated that Plaintiff's flex schedule would be eliminated and she would be required to work five days a week, for eight hours per day. [Id.] Nancy, Jarod, and Shaun all credibly testified that the proposed elimination of the flex schedule was the result of productivity problems Unleaded experienced when Plaintiff was out of the office, and the Court concludes that productivity was the reason for the proposed change in schedule. Plaintiff was unhappy with this final proposed change.

         In response, Plaintiff sent Shaun an email that same day, stating that she had been on the flex schedule for over a year and had not had any reason to believe it was not working. [Id. at Bates U.S. 0434] She further stated that she could “only assume this [schedule change] [wa]s because of the negotiation to the part time position [and] because [she was] pregnant.” [Id.] She said she felt that she was “being discriminated against ever since [she] told management [she] was pregnant.” [Id.] She indicated that she had told Shaun during the meeting that she felt the “work environment [wa]s hostile” and that she was “being treated differently.” [Id.] She concluded by stating that Unleaded could not fire or reassign her because she was pregnant, and that she hoped Unleaded would rectify the situation before she had to file a complaint. [Id.]

         Shaun forwarded Plaintiff's email to Nancy and Jarod, with a statement that she would “deal with this.” [Id.] Nancy responded in an email telling Shaun Clark to “[b]eware of the conversation vs. email, ” and stating that “[e]mail is all that matters in a lawsuit, as you know memory of conversations holds no value.” [Ex. 28 at Bates U.S. 0174]

         On September 5, 2014, Shaun responded to Plaintiff's email accusing Unleaded of discrimination. [Ex. A-19 at Bates U.S. 0198] She explained that Unleaded was not attempting to fire or reassign Plaintiff, and that Unleaded was “very happy to have [Plaintiff] at the full-time position.” [Id.] She further explained that Unleaded was “truly impressed with the quality of work that [Plaintiff] ha[d] put in over the years.” [Id.] Finally, she informed Plaintiff that the changes to the position were not designed to discriminate against Plaintiff, but were the result of a “need to constantly improve [Unleaded's] process.” [Id.]

         Plaintiff responded by thanking Shaun for the “kind words, ” saying that they “help[ed] considering all the negativity and hostility [Plaintiff had] been shown over the past several weeks.” [Id. at Bates U.S. 0197] Plaintiff further agreed with the first two changes to her position-transitioning responsibility for project management assignments and Active Collab review to other employees-stating that they were items that she “too ha[d] been saying for quite some time should change.” [Id.] Nonetheless, she continued to ...