D. Scott Crook (7495)scott.crook@smithlawonline.comKathryn J. Steffey (10245)ksteffey@smithlawonline.comSMITH HARTVIGSEN, PLLC215 S. State Street, Suite 650Salt Lake City, Utah 84111Telephone (801) 413-1600Facsimile (801) 413-1620

Attorneys for Claimant

BEFORE THE AMERICAN ARBITRATION ASSOCIATION

EMMANUEL D. KEPAS,

Claimant,

v.

EBAY, INC., a Delaware Corporation

Respondent.

:::::::::::

MEMORANDUM IN OPPOSITION TO

RESPONDENT EBAY INC.’S MOTION FOR SUMMARY

JUDGMENT

“CONFIDENTIAL”

This Document is subject to a PROTECTIVE ORDER and may not be examined or copied except in compliance with

that Order

Case No. 77 460 00465 06

Claimant, Emmanuel D. Kepas, by and through his attorneys of record, respectfully

submits his Memorandum in Opposition to Respondent eBay Inc.’s Motion for Summary

Judgment.

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TABLE OF CONTENTS

INTRODUCTION..........................................................................................................................iRESPONSE TO STATEMENT OF UNDISPUTED MATERIAL FACTS..............................iARGUMENT..................................................................................................................................1

I. DEFENDANT EBAY’S MOTION FOR SUMMARY JUDGMENT SHOULD BE DENIED......................................................................................................................................1

a. Mr. Kepas’ Retaliation Claim...........................................................................................2i. Prima Facie Case..............................................................................................................2

1. Adverse Employment Action........................................................................................32. Causal Connection.........................................................................................................7

ii. Evidence of Pretext...........................................................................................................8b. Mr. Kepas’ Sexual Harassment and Discrimination Claims.......................................11

i. Sexual Harassment..........................................................................................................121. Hostile Work Environment.........................................................................................122. Quid Pro Quo................................................................................................................24

ii. Discrimination on Basis of Sex.......................................................................................25c. Mr. Kepas’ Age Discrimination Claim...........................................................................30d. Mr. Kepas’ Breach of Contract Claims.........................................................................31

i. Contractual Relationship.................................................................................................32ii. Claims Are Not Duplicative............................................................................................35

e. Causation...........................................................................................................................36CONCLUSION............................................................................................................................40

4816-0212-7106/KE007-001 i

INTRODUCTION

eBay claims that there are no disputed issues of fact such that summary judgment may be

granted. However, as can be seen from Mr. Kepas’ responses below, it is evident that there are

numerous disputed issues of material fact in this case. As such, eBay’s motion for summary

judgment is improper and should be denied.

RESPONSE TO STATEMENT OF UNDISPUTED MATERIAL FACTS

Mr. Kepas responds to eBay’s Statement of Undisputed Material Facts as follows:

1. eBay is an equal opportunity employer with policies that prohibit discrimination, harassment, and retaliation in the workplace.

Response: It is undisputed that eBay’s Fair Employment Policies state that “eBay maintains a

strict policy prohibiting conduct which treats employees differently based on any status protected

by law, such as race, color, religion, gender, physical or mental disability, pregnancy, medical

condition, national origin, ancestry, age, sexual orientation, or marital status.” (eBay’s Fair

Employment Policies at 1, attached hereto as Exhibit 1.) Additionally, eBay’s policies state that

“[a]n employee or contractor who reports an incident in good faith should not fear any reprisal.

Retaliation or reprisal is expressly forbidden and will be grounds for disciplinary action up to

and including termination.” (Id. at 2.)

2. eBay’s Discrimination and Harassment-Free Workplace Policy states that eBay is committed to providing a work environment that is free from discrimination, including sexual harassment, and that any employee who believes he or she has been harassed should immediately report the facts to a manager, human resources, or a management representative.

4816-0212-7106/KE007-001 i

Response: Disputed. Although it is undisputed that eBay’s Discrimination and Harassment-

Free Policy states that it is committed to providing a work environment that is free from

discrimination, it states that

[a]ny employee or contractor who believes they have been subjected to conduct in violation of this policy, or who has witnessed such conduct, . . . should immediately report the facts of the incident or incidents and the name of the person(s) involved to any of the following individuals: your manager, Human Resources, the Legal department or a management representative.

(Id. at 2.)

3. eBay hired Kepas as a manager in its eWatch department in July 2003.

Response: Undisputed. In July 2003, eBay hired Mr. Kepas, on a probationary basis, to work at

its Draper, Utah, facility as the Manager of its eWatch Team. (See Affidavit of Emmanuel

Kepas, dated September 15, 2006 (“Kepas Affidavit”) at ¶ 2, attached hereto as Exhibit 2.) In

November 2003, after determining that Mr. Kepas satisfactorily completed his duties during the

probationary employment period, eBay removed Mr. Kepas from probationary status and

extended him an offer of continued employment as the Manager of the eWatch Team. (Id. at ¶

3.)

4. As the eWatch manager, Kepas managed a team of employees responsible for receiving complaints or reports of problems with the eBay Web site and escalating those reports to the appropriate individuals for resolution.

Response: Undisputed.

5. The eWatch team consisted of day, swing, and graveyard shift employees.

Response: Undisputed. The eWatch department operated 24 hours per day, seven days a week.

(See Deposition of Emmanuel Kepas (“Kepas Depo.”) at 33, 41. A copy of relevant portions of

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the Kepas Depo. is attached hereto as Exhibit 3.) At the time Mr. Kepas was hired in July 2003,

until he was demoted in February 2005, he was the only manager of the team. (See id. at 37.)

6. At the time he was hired, Kepas executed an acknowledgement stating that he had been “informed of the Company’s Anti-harassment policy during New Employee Orientation.”

Response: Disputed. Mr. Kepas executed the Employee Acknowledgement form after eBay

determined that he had successfully performed his duties during the probationary employment

period and extended Mr. Kepas an offer of continued employment as the Manager of the eWatch

Team. (See Employee Acknowledgement, signed November 7, 2003, attached hereto as Exhibit

4; Kepas Depo. at 198; Kepas Affidavit at ¶¶ 2-3.)

7. In addition to receiving a copy of the policy when he was hired, Kepas received training about the policy on more than one occasion.

Response: It is undisputed that Mr. Kepas testified that he believed he may have attended two

training modules on eBay’s discrimination and harassment policies throughout his tenure at

eBay. (See Kepas Depo. at 26.)

8. Furthermore, as the eWatch manager, Kepas took steps to enforce eBay’s anti-harassment policies.

Response: Undisputed.

9. In late 2004, Kepas had a telephone conversation with his supervisor, Carolyn Patterson, in which she expressed her dissatisfaction with his performance.

Response: Undisputed. Although Ms. Patterson testified that she did not have any problems

with Mr. Kepas’ performance, (see Deposition of Carolyn Patterson (“Patterson Depo.”) at 8. A

copy of relevant portions of the Patterson Depo. is attached hereto as Exhibit 5), she nonetheless

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“berate[d]” Mr. Kepas during a phone call on November 30, 2004, for alleged complaints and

performance deficiencies, (see Kepas Depo. at 46.) However, when Mr. Kepas asked Ms.

Patterson during the phone call for examples or details of his alleged performance problems, Ms.

Patterson refused to provide any explanation. (See id. at 46-47.) Despite the fact that Mr. Kepas

had consistently received meets or exceeds annual and quarterly performance ratings for 2004,

had received very good scores and favorable comments in the Upward Feedback surveys from

his department, and had not received any written warnings or other disciplinary action, Ms.

Patterson nonetheless indicated in her phone call to Mr. Kepas that his alleged performance

problems were “unaddressable.” (Mr. Kepas’ Notes to Jeff Anderson, dated December 6, 2004,

at 2, attached hereto as Exhibit 6; see also Individual Performance Scores for Manny Kepas Q4

2003 –Q1 2006, attached hereto as Exhibit 7; eBay Upward Feedback Survey Q2 2004,

Emmanuel Kepas, attached hereto as Exhibit 8; eBay Upward Feedback Survey Q4 2004,

Emmanuel Kepas, attached hereto as Exhibit 9; Patterson Depo. at 8.)

Prior to Ms. Patterson’s November 30, 2004 phone call to Mr. Kepas, Ms. Jones, an eBay

Vice President that was not currently over the eWatch Department, Jim Weber, an eBay

Director, and Ms. Patterson had already “agreed in concept” to replace Mr. Kepas with Ms.

Dutton. (Email from Mike Bringuel, Senior Director of Human Resources, to Jeff Anderson,

Manager of Human Resources, dated November 19, 2004 (“November 19, 2004 Email”),

attached hereto as Exhibit 10.) This decision was made despite “apparent recent performance

concerns” on Ms. Dutton’s part, (id.), including specifically Ms. Dutton’s attempt to “single out

the people who gave her poor [Upward Feedback comments].” (Email from Mike Bringuel,

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Senior Director of Human Resources, to Erin Earle, Director of Human Resources, dated

December 3, 2004 (“December 3, 2004 Email”), attached hereto as Exhibit 11.) Although

eBay’s Senior Director and Director of Human Resources expressed concerns about Ms.

Dutton’s prior performance problems, Ms. Dutton nonetheless replaced Mr. Kepas as the eWatch

Manager in February 2005. (November 19, 2004 Email; December 3, 2004 Email; Kepas Depo.

at 44.) At the time of Mr. Kepas’ demotion, both Mr. Bringuel and Ms. Heitland did not support

taking any “formal corrective action against Manny because his record of performance didn’t

support that type of move.” (Draft of Investigation Summary, dated March 16, 2006 (“March

16th Draft of Summary”), at 1, attached hereto as Exhibit 12.)

Mr. Kepas was subsequently informed by Mark Fawson, a Director at eBay, that the

decision to demote Mr. Kepas and transfer Ms. Dutton to the eWatch Manager position was

made after a meeting was held between Ms. Patterson, Ms. Jones, Mr. Weber, and Ms. Dutton.

During that meeting, Ms. Dutton lobbied for the eWatch Manager position by making a

presentation. (See Kepas Depo. at 61-62; Deposition of Mark Fawson (“Fawson Depo.”) at 33,

64. A copy of relevant portions of the Fawson Depo. is attached hereto as Exhibit 13.) In

addition to the fact that Ms. Dutton had recently been interviewed by HR regarding her attempt

to identify an employee who gave her unfavorable feedback, it was apparent that, at the time of

this meeting, Ms. Dutton’s current position in the TnS Department was being eliminated because

Ms. Dutton’s direct reports “had become skilled enough that they were ready to report directly

to” Ms. Dutton’s supervisor, and Ms. Dutton’s role “had become more technical and more

product management focused, which were skills that she didn’t have.” (Deposition of Eric

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Salvatierra (“Salvatierra Depo.”) at 19-20. A copy of relevant portions of the Salvatierra Depo.

is attached hereto as Exhibit 14.)

10. Ms. Patterson told Kepas that he was “confrontational” and inflexible in the way he dealt with others, that he did not “see the Big Picture,” that he had not effectively cultivated and managed relationships in and outside his team, and that “there were no problems with eWatch but with him.”

Response: It is undisputed that, during the call, Ms. Patterson alleged that Mr. Kepas had

several performance problems, although Ms. Patterson refused to provide Mr. Kepas with any

specific examples or details. (See Mr. Kepas’ Notes to Jeff Anderson, dated December 6, 2004;

Kepas Depo. at 46-47.) However, when asked under oath whether she had “any problems with

Mr. Kepas’ performance,” Ms. Patterson responded, “No.” (Patterson Depo. at 8.) Moreover,

Mr. Kepas’ record of performance at the time of his demotion did not support taking formal

corrective action. (See March 16th Draft of Summary at 1.)

11. Thereafter, in January 2005, Kepas (who was 43 years old at the time) was demoted from the position of eWatch manager to the position of analyst.

Response: Undisputed. Although Ms. Patterson alleged that Mr. Kepas had received

unspecified complaints and had performance issues that were “unaddressable,” (Mr. Kepas’

Notes to Jeff Anderson, dated December 6, 2004, at 2), Mr. Kepas was not told that his demotion

was a result of any performance deficiencies. (See Email from Janna Heitland, HR Manager, to

Carolyn Patterson, dated December 16, 2004, attached hereto as Exhibit 15 (“If you and Susan

decide to move Manny to a T25, I would recommend not taking his pay away—mostly because

we are communicating to Manny that this would happen regardless of his performance.).) This

was presumably so because Mr. Kepas’ record of performance did not support taking formal

4816-0212-7106/KE007-001 vi

corrective action. (March 16th Draft of Summary at 1.) When asked whether Ms. Patterson, Mr.

Kepas’ immediate supervisor, supported the decision to replace Mr. Kepas, she testified that she

did not campaign for the change and that she supported the decision only in the sense that she

“supported [her] manager.” (Patterson Depo. at 30-31.)

Moreover, although Mr. Kepas was demoted to an analyst, Ms. Dutton’s soon-to-be-

supervisor, Chris Colgan, indicated that “he wanted to keep Manny in the [management] chain

for some or even all of this team, even under Susan.” (Email from Mike Bringuel to Jeff

Anderson, dated February 11, 2005, attached hereto as Exhibit 16.) And Ms. Heitland testified

that, despite Mr. Kepas’ demotion, he continued to perform management responsibilities for the

eWatch Department, necessitating a subsequent change in Mr. Kepas’ title back to Manager.

(See Deposition of Janna Heitland (“Heitland Depo.”) at 97-99. A copy of relevant portions of

the Heitland Depo. is attached hereto as Exhibit 17.)

12. In February 2005, Susan Dutton (who was 37 years old at the time) was selected to replace Kepas as manager of the eWatch team.

Response: Disputed. As evidenced by the emails between Ms. Earle and Mr. Bringuel, Ms.

Jones, Ms. Patterson, and Mr. Weber had already decided to replace Mr. Kepas with Ms. Dutton

by, at least, November 19, 2004, nearly two weeks before Mr. Kepas received the phone call

from Mr. Patterson. (See November 19, 2004 Email). This decision was made less than five

months after it was reported to the Human Resources department that Ms. Dutton had attempted

to single out an employee who had given her unfavorable feedback, resulting in an investigation

by HR. (See Email from Jeff Anderson to Mike Bringuel, dated June 28, 2004, attached hereto

4816-0212-7106/KE007-001 vii

as Exhibit 18 (“Unfortunately, the employee she is targeting overhead [sic] their conversation

and he approached me yesterday. The manager is Susan Dutton.”); Notes of Investigation,

attached hereto as Exhibit 19.) When the Senior Director and Director of Human Resources

expressed their hesitation and concern with the decision, which would result in a promotion to

Ms. Dutton, they received inconsistent explanations regarding Ms. Dutton’s performance

problems. (See Email from Mike Bringuel to Erin Earle, dated December 3, 2004, attached

hereto as Exhibit 20 (“Eric told Jim that he would support a promo for Susan in that move

because the issues with her performance were related to her being a poor fit for the TnS role and

would not be a factor in the eWatch role. But that doesn’t jive with the story Jeff told me about

Susan trying to single out the people who gave her poor [Upward Feedback results] .”)

(emphasis added).)

According to Ms. Heitland, any “positions that would open are required to be posted.”

(Heitland Depo. at 14.) Moreover, the policy at eBay is that the hiring manager performs the

interview with the candidate and makes the final selection. (Id. at 18.) However, in this case,

the eWatch position was never posted, and Ms. Patterson never interviewed Ms. Dutton or made

the decision to hire her. (See Deposition of Susan Dutton (“Dutton Depo.”) at 111. A copy of

relevant portions of the Dutton Depo. is attached hereto as Exhibit 21; Patterson Depo. at 29.)

13. After his demotion, Kepas claims that he continued to manage all members of the eWatch team (including the day, swing, and graveyard shift employees), but now did so under Ms. Dutton’s direction.

Response: It is undisputed that, at the time Ms. Dutton replaced Mr. Kepas as the eWatch

Manager, the only employee in that department that reported to her was Mr. Kepas. (See Dutton

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Depo. at 59; Kepas Depo. at 60.) Indeed, it was because Mr. Kepas continued to manage the

eWatch team after his demotion that Ms. Heitland determined that his title should be changed to

reflect his actual position of “Manager.” (Heitland Depo. at 98.)

14. After she became the manager of the eWatch team, Ms. Dutton believed Kepas’ performance as a supervisor was deficient in numerous respects:

He really lacked the ability to show leadership with the team. I saw that there were ineffective one-on-ones. A lot of times the team would do what they want while he just sat at his desk and kind of buried his head in his work.

I noticed that when interacting with the employees it would be instead of more of a leader, it would be more of a buddy, friend type relationship. He wasn’t holding them accountable for their attendance adherence at that time. They pretty much were coming and going when they wanted to go.

I saw gaps in the way he demonstrated ownership. Instead of letting them do things, he would just take it on himself or—and I also saw a lack in his technical skills abilities. What he would do is he would go to most of the CSRs and have them write emails for him or have them proofread or ask them over and over again, “Now what happened? How does that happen? What does that mean?”

So a lot of early on the people management, people leadership abilities with some of the caveats that I added to that.

Response: Disputed. Although Ms. Dutton now claims that Mr. Kepas had performance

deficiencies, she consistently rated Mr. Kepas as meeting or exceeding expectations and she

never disciplined Mr. Kepas. (See Individual Performance Plan & Review Q1 2005, attached

hereto as Exhibit 22; Letter from Susan Dutton to Emmanuel Kepas, dated May 4, 2005, attached

hereto as Exhibit 23; Dutton Depo. at 162; Individual Performance Plan & Review Q2 2005,

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attached hereto as Exhibit 24; Letter from Susan Dutton to Emmanuel Kepas, dated July 26,

2005, attached hereto as Exhibit 25; Dutton Depo. at 186; Individual Performance Plan &

Review Q3 2005, attached hereto as Exhibit 26; Individual Performance Plan & Review Q4

2005, attached hereto as Exhibit 27; Dutton Depo. at 142, 144, 146, 151, 155, 158, 166, 167,

181, 188, 189-90, 191, 196, 206, 209.) Moreover, Ms. Dutton actually presented Mr. Kepas with

an eBay Behaviors Award in October 2005 for “his strength in leading the eWatch team . . .

while Susan was on Sabbatical.” (See eBay Behaviors Award, attached hereto as Exhibit 28.)

Finally, Ms. Dutton testified that, while she did “coach” Mr. Kepas during their one-on-ones,

coaching is not discipline but is meant to “help make an employee be better at what they [sic]

do.” (Id. at 62.)

15. In an attempt to help Kepas improve his performance, Ms. Dutton regularly provided developmental feedback to Kepas on various issues she believed needed improvement.

Response: It is undisputed that Ms. Dutton provided Mr. Kepas with coaching during their one-

on-ones, which included “positive feedback coaching and developmental coaching.” (Dutton

Depo. at 62.) However, these one-on-one meetings were held in conformity with both eBay’s

policy to hold monthly one-on-ones with each of its employees and Ms. Dutton’s practice of

always giving “coaching or feedback” to the “people that are reporting to [her].” (See Heitland

Depo. at 76; Dutton Depo. at 144-45.)

16. Ms. Dutton coached Kepas on the way he conducted one-on-ones with members of his team and provided feedback to members of his team.

4816-0212-7106/KE007-001 x

Response: Undisputed. As testified to by Ms. Dutton, this “coaching, feedback, positive

feedback, performance feedback” did not constitute discipline of any kind and was consistent

with her practice of providing feedback and coaching to “the people that are reporting to [her].”

(Dutton Depo. at 62, 144-45.)

17. Ms. Dutton coached Kepas that feedback on job performance should be done in private and on a timely basis, not by email.

Response: See Response to Statement of Fact No. 16.

18. Ms. Dutton coached Kepas to “work on listening skills and not interrupt others when they are talking.”

Response: See Response to Statement of Fact No. 16; see also Dutton Depo. at 151 (stating that

this particular feedback did not constitute discipline).

19. Ms. Dutton coached Kepas about improper interactions he had with eWatch team members he supervised. For example, in July 2005, Kepas told a team member that a doll’s head that the team member had in his cubicle was offensive to another member of the team. In fact, Ms. Dutton discovered it was Kepas who objected to the doll’s head, and he had untruthfully attributed the complaint to another team member.

Response: Disputed. It is undisputed that Ms. Dutton coached Mr. Kepas regarding the manner

in which Mr. Kepas addressed the doll-head displayed on Clint Ericson’s desk.1 However, Ms.

Dutton testified that this “coaching” did not constitute discipline. (See Dutton Depo. at 190-91.)

Although Ms. Dutton claims that Mr. Kepas “untruthfully attributed the complaint to another

1 One night, Mr. Kepas made a comment regarding a doll-head on a stick displayed on Mr. Ericson’s desk. Carolyn Vahdati, another eWatch employee, then voiced her opinion regarding the doll-head and stated that it made her feel uncomfortable. Thereafter, Mr. Kepas spoke to Mr. Ericson about the doll-head and asked him to remove it. (Kepas Depo. at 161-62.)

4816-0212-7106/KE007-001 xi

team member,” Mr. Kepas testified that Ms. Vahdati did state that the doll-head made her feel

uncomfortable. (See Kepas Depo. at 161-62.)

20. Ms. Dutton coached Kepas that certain members of the team believed he did not take responsibility for eBay management directives, but rather blamed policies he believed were unpopular on Ms. Dutton.

Response: Disputed. Although Ms. Dutton testified that she documents every coaching session

and conversation she has with her employees, (see Dutton Depo. at 62, 65), eBay has not

provided any documentation to show that Ms. Dutton coached Mr. Kepas on the information

contained in Exhibit 12 to eBay’s Memorandum in Support of its Motion for Summary

Judgment. Moreover, although Exhibit 12 states that Ms. Dutton received “feedback from

several ewatch folks,” Ms. Dutton testified that the feedback came from only two employees—

Susanne Strong and another employee, the identity of which she could not recall. (See Dutton

Depo. at 192.)

The feedback Ms. Dutton received from Ms. Strong is attributable to the effects of Ms.

Dutton’s harassment. Indeed, Mr. Kepas testified that Ms. Dutton would give him inconsistent

directions, such when Ms. Dutton instructed him to write up an employee for failing to call in or

come to work, but then told Mr. Kepas in front of the employee that he acted inappropriately for

preparing the written warning. (Kepas Depo. at 146.) Moreover, Susanne Strong, the only

identified employee upon whom Ms. Dutton based Exhibit 12, testified that, after Ms. Dutton

became the eWatch Manager, she noticed a change in the way Mr. Kepas managed the eWatch

team. Indeed, Ms. Strong stated that Mr. Kepas “started to micromanage some things that were

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fairly inconsequential.” (Deposition of Susanne Strong (“Strong Depo.”) at 11. A copy of

relevant portions of the Strong Depo. is attached hereto as Exhibit 29.)

21. Ms. Dutton coached Kepas for making a comment that was interpreted by a team member as being derogative of gays or lesbians.

Response: Disputed. Mr. Kepas did not make a comment that was interpreted by a team

member as being derogative of gays or lesbians. Rather, as testified to by Ms. Dutton, Mr.

Kepas was concerned that a statement he made may have been seen as derogatory to those with

alternative lifestyles, and he therefore spoke with two members of his team to ensure that they

did not misunderstand his comment. (See Dutton Depo. at 196.) Mr. Kepas then informed Ms.

Dutton of his comment and his actions in meeting with the two employees, and Ms. Dutton

provided “coaching” on “professionalism and acting more as a leader, not a buddy.” (Id.) Ms.

Dutton did not discipline Mr. Kepas for his comment or the manner in which he addressed it with

the employees. (Id.)

22. Notwithstanding the coaching and developmental feedback, Ms. Dutton believed that Kepas’ performance remained deficient throughout 2005:

Q: And over the course of your supervising him, did he make the improvements you wanted him to make?A: It was kind of a roller coaster with Manny. He would improve in something and then all of a sudden he would do something that would—you know—we would meet again and I would give him more feedback on the people leadership practices. And this occurred all throughout the year.

And you can see from the documentation on my one-on-ones, the main things were the leadership, the accountability, the ownership, demonstrating leadership. So, you know, and then running into some of those employee issues, lying about the whole doll head issue about lying on his employee, creating a big fiasco there.

4816-0212-7106/KE007-001 xiii

So there was a theme throughout the whole year with some of the development and coaching that I was providing him throughout 2005.

Response: Disputed. Ms. Dutton consistently rated Mr. Kepas as meeting or exceeding eBay’s

standards. Indeed, although eBay submitted a document entitled “Individual Performance Scores

for Manny Kepas,” attached hereto as Exhibit 7, that document is not accurate and reports scores

lower than Ms. Dutton actually gave to Mr. Kepas.2 For the first quarter of 2005, Ms. Dutton

gave Mr. Kepas a score of 100%, which is the highest score possible under the “meets

expectations” section. (See Individual Performance Plan & Review Q1 2005; Letter from Susan

Dutton to Emmanuel Kepas, dated May 4, 2005; Dutton Depo. at 162.) For the second quarter,

Ms. Dutton gave Mr. Kepas a score of 105%, which meant that Mr. Kepas exceeded

expectations. (See Individual Performance Plan & Review Q2 2005; Letter from Susan Dutton

to Emmanuel Kepas, dated July 26, 2005; Dutton Depo. at 186.) For the third quarter, Ms.

Dutton gave Mr. Kepas a score of 97%, meaning that Mr. Kepas’ performance met expectations.

(See Individual Performance Plan & Review Q1 2005.) Finally, for the fourth quarter of 2005,

Ms. Dutton gave Mr. Kepas a score of 92%, meaning that Mr. Kepas’ performance again met

eBay’s expectations. (See Individual Performance Plan & Review Q4 2005.)

23. In March 2005, Kepas alleges that Ms. Dutton “flirtatious[ly]” invited him to her house “so they could get to know each other better.”

Response: Undisputed. Mr. Kepas testified that this flirtatious invitation occurred during one of

his one-on-ones with Ms. Dutton. (See Kepas Depo. at 85-86.)

2 In his Declaration, Mr. Ericson stated that Ms. Dutton attempted to retroactively lower his performance scores after he informed her that he was quitting. See Declaration of Clinton Ericson (“Ericson Declaration”) at ¶ 18, attached hereto as Exhibit 30.

4816-0212-7106/KE007-001 xiv

24. Kepas alleges that he declined the invitation and Ms. Dutton said “something to the effect of, ‘You could bring your son with you and he could play basketball with [my son] and we could go inside and talk.’” After Kepas again declined the invitation, Ms. Dutton allegedly said, “’Well, just think about it.’ And [Kepas] said no. And that was the end of the conversation.”

Response: Undisputed. Mr. Kepas testified that Ms. Dutton’s invitation made him “very

uncomfortable” because of the flirtatious manner in which she invited him to her home to “spend

more time with her one on one.” (Id. at 86.)

25. Ms. Dutton steadfastly denies inviting Kepas to her house.

Response: It is undisputed that Ms. Dutton denies inviting Mr. Kepas to her house. However,

Ms. Dutton also denied exposing her breasts to a group of eBay employees, including Ms. Jones,

an eBay Vice President. (See Dutton Depo. at 263.) However, Ms. Jones subsequently testified

that the event did in fact occur. (See Deposition of Wendy Jones (“Jones Depo.”) at 50. A copy

of relevant portions of the Jones Depo. is attached hereto as Exhibit 31.) Ms. Dutton also denied

that her son was ever arrested for rape or that she ever discussed the incident with Mr. Kepas or

any other employees at eBay. (See Dutton Depo. at 261.) Again, however, evidence gathered

from the Salt Lake County District Attorneys’ Office and the Midvale Police Department shows

that Ms. Dutton’s son was arrested for rape, (see Arrest Display, attached hereto as Exhibit 32;

Midvale Police Department Law Incident Table, attached hereto as Exhibit 33), and at least one

employee other than Mr. Kepas testified that he heard “stories” about charges of rape against Ms.

Dutton’s son. (Deposition of William Scott Berger (“Berger Depo.”) at 15. A copy of relevant

portions of the Berger Depo. is attached hereto as Exhibit 34.) Ms. Dutton also denied

performing a lap dance during an eBay party. (See Dutton Depo. at 263.) However, Brandon

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Scheuerman, a former eWatch employee, declared under criminal penalty that he personally

witnessed Ms. Dutton perform a lap dance on an unidentified male during an eBay Christmas

Party. (See Declaration of Brandon Scheuerman (“Scheuerman Declaration”) at ¶ 3, attached

hereto as Exhibit 35.)

26. Ms. Dutton also steadfastly denies ever having any romantic interest in Kepas.

Response: See Response to Statement of Fact No. 25.

27. Kepas also claims that during 2005, Ms. Dutton made several other improper comments. Kepas, however, admits that he did not report these comments or complain to anyone at eBay about them before leaving the company:

Kepas alleges that Ms. Dutton showed him a picture on her computer of a swimsuit she intended to purchase. Kepas did not report this incident to anyone at eBay. Kepas alleges that Ms. Dutton showed him a picture on her computer of a dress “she was going to wear to a company party.” Kepas alleged that Ms. Dutton stated, “I hate doing things with the lights on.” Kepas did not report this incident to anyone at eBay. Kepas alleges that Ms. Dutton “dress[ed] in clothing that, although it met the guidelines of eBay’s dress code policy, would be tight fitting, often times with writing or glitter across her breast area.” Although Kepas claims to have been offended by Ms. Dutton’s attire, he never complained about her attire to anyone at eBay at any time. Kepas alleges that Ms. Dutton used the “F word.” Kepas never reported this to anyone at eBay. Kepas alleges that, on one occasion, Ms. Dutton told him that “she spent the whole weekend in bed with her boyfriend and she got a kidney infection and that these things could be life threatening.” Kepas did not report this to anyone at eBay. Kepas alleges that that Ms. Dutton told him that “her son had been arrested for drunk driving” and, on another occasion, that her son had been arrested “for raping a young woman.” Kepas never reported these comments to anyone at eBay.

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Response: Disputed. Mr. Kepas testified that Ms. Dutton made several inappropriate comments

and sexual innuendo during the year that she supervised him. For example, in the summer of

2005, Ms. Dutton called Mr. Kepas over to her desk and showed him the bikini, modeled by a

mannequin, that she had purchased from the eBay site for her July 2005 vacation. (Kepas Depo.

at 90.) Mr. Dutton also asked Mr. Kepas to come to her desk to view a small black dress, which

was modeled by a woman, that she was purchasing for a party. (Id. at 91-92.)

In the fall of 2005, when Mr. Kepas and Ms. Dutton entered a conference room for

another one-on-one, Ms. Dutton slammed her books down on the table and stated she was going

to “F’ing kill [her son]” because he had been arrested for “raping” a young woman. (Id. at 93.)

Ms. Dutton then proceeded to tell Mr. Kepas about the charges and how the case had been

dropped because a friend of Ms. Dutton’s son was present during the incident and indicated that

it was consensual. (Id.) Although eBay and Ms. Dutton claim that Ms. Dutton’s son was never

arrested for rape, (see Mem. in Supp. at 12 n.1), documents from the Salt Lake County

Attorneys’ Office and the Midvale Police Department show that Ms. Dutton’s son was indeed

arrested for an alleged rape occurring in late 2004. (See Arrest Display; Midvale Police

Department Law Incident Table.)

In the winter of 2005, after Ms. Dutton’s invitation to Mr. Kepas to come to her home,

Mr. Kepas and Ms. Dutton walked into a conference room for a one-on-one, and Ms. Dutton

turned off the lights in the room, stating “I hate doing things with the lights on.” (Id. at 97.)

Mr. Kepas also testified that Ms. Dutton would wear “tight fitting” clothing, “often times

with writing or glitter across her breast area.” (Id. at 100.) Moreover, Ms. Dutton would

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frequently make sudden movements while Mr. Kepas was speaking with her to draw attention to

her chest. Indeed, Mr. Kepas testified that he “would be at her desk working on something or

talking to her for a minute. As [he] was there looking her in the eye, she would suddenly stand

up so that [he] would be looking at her in the chest” or “she would bend over and buckle her

shoe or tie her shoe, wearing a low-cut, tight-fitting shirt that would express [sic] the upper

portion of her breast.” (Id. at 100-01). Mr. Fawson, an eBay Director, testified that he similarly

believed Ms. Dutton’s dress was revealing, and he reported his concerns to Ms. Dutton’s

supervisor, Tim Paine, on several occasions. (See Fawson Depo. at 45, 70.) And Mr. Ericson

stated that he witnessed Human Resources speaking with Ms. Dutton, after which, Ms. Dutton

would leave work and return in different clothing. (See Ericson Declaration at ¶ 8.)

Mr. Kepas also testified that Ms. Dutton used the “F word” during one-on-ones, such as

saying in a loud voice, “[i]t’s “F’ing freezing in this room,” as a way to offend and harass him.

(Kepas Depo. at 98-99.)

Ms. Dutton would also describe her relationship with her boyfriend to Mr. Kepas and, on

one occasion, told Mr. Kepas that “she spent the whole weekend in bed with her boyfriend and

she got a kidney infection.” 3 (Id. at 110.)

Ms. Dutton also told Mr. Kepas on more than one occasion that Ms. Jones was “coming

on to her” and “hitting on her.” (Kepas Depo. at 67.)

3 Mr. Ericson stated that Ms. Dutton would have similar conversations with him regarding her boyfriend, such as telling Mr. Ericson that her boyfriend had been on the Internet looking at pornography and that she suspected that he was sleeping with other women. (See Ericson Declaration at ¶ 6.)

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Mr. Kepas testified that he did not initially report these incidents to eBay because he was

afraid of retribution. (Id. at 95.) Indeed, because eBay took no action on his complaint to

Human Resources regarding Ms. Patterson’s call in November 2004, Mr. Kepas testified that he

did not trust eBay and was “afraid to report anything to anyone at eBay.” (Id. at 94-95.)

Moreover, because Mr. Kepas knew Ms. Dutton and Ms. Jones were close and had heard of Ms.

Dutton’s treatment of other employees, Mr. Kepas feared that if he reported Ms. Dutton, he

would be retaliated against. (Id. at 95.)

After Mr. Kepas reported some of his concerns to the eBay Hotline, he indicated to Mr.

Bringuel, the Senior Director of Human Resources, that he had other incidents to report. Indeed,

in an email to Mr. Kepas, Mr. Bringuel states, “I am certain that I will need to speak to you again

at that time, as you indicated to me last week that you had not told Jeff about all of the events

that have occurred that you believe are relevant to your concerns.” (Email from Mike Bringuel

to Manny Kepas, dated March 7, 2006, attached hereto as Exhibit 36.) However, Mr. Bringuel

never undertook to investigate these additional events because Mr. Kepas filed a charge of

discrimination with the Labor Commission. (See Email from Mike Bringuel to Manny Kepas,

dated March 31, 2006, attached hereto as Exhibit 37; Deposition of Michael Bringuel (“Bringuel

Depo.”) at 53. A copy of relevant portions of the Bringuel Depo. is attached hereto as Exhibit

38.)

Although eBay hired Deborah Stone from an HR consulting firm to conduct an

investigation into Mr. Kepas’ claims, Ms. Stone similarly failed to speak with Mr. Kepas.

Indeed, while Ms. Stone initially indicated that she was willing and available to meet with Mr.

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Kepas and his counsel on Thursday, May 4, 2006, at 12 p.m., she then emailed Mr. Kepas and

stated “[i]n the interests of time, and to maintain eBay’s investigation as internal, we’ll proceed

in the investigation and formulating eBay’s response without meeting with you.” (See Email

from Deborah Stone to Scott Crook, dated May 1, 2006, attached hereto as Exhibit 39; Email

from Deborah Stone to Scott Crook, dated May 2, 2006, attached hereto as Exhibit 40.) Ms.

Stone then conducted an “investigation,” which consisted of speaking with the eWatch

employees over the telephone while they were at their desks and within feet of Ms. Dutton. (See

Deposition of Aubrey Anderson (“Aubrey Depo.”) at 17-18, 64. A copy of relevant portions of

the Aubrey Depo. is attached hereto as Exhibit 41.) Of course, Ms. Stone misstated this fact in

her deposition, stating that the employees were on a telephone in a conference room during the

interviews. (See Deposition of Deborah Stone (“Stone Depo.”) at 44. A copy of relevant

portions of the Stone Depo. is attached hereto as Exhibit 42.) No one in either eBay’s Human

Resource Department or a firm hired by eBay ever spoke with Mr. Kepas about the additional

incidents that he initially discussed with Mr. Bringuel.

28. Kepas claims that in approximately August 2005, he developed tinnitus, a condition that, in his case, caused a “high pitched, electronic type buzzing noise in [his] head.”

Response: It is undisputed that, in August 2005, Mr. Kepas began noticing a high pitched noise

in his head, which was ultimately diagnosed as tinnitus. (Kepas Depo. at 128.)

29. Kepas alleged in the workers’ compensation proceeding that his tinnitus was a workplace injury caused by exceptional workplace stress, demands and scheduling. Kepas stated that his tinnitus resulted from workplace stress, regardless of any alleged discrimination or harassment:

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A: Environmental stress is the nature of the job that I was performing. In my opinion, based on the—my lifestyle, the work I was doing, regardless of the harassment, hostile work environment, the tinnitus would have most likely still occurred because of the lifestyle I was leading, not sleeping through the night, waking up and checking my emails, pretty much every day at three a.m., . . . I was in a constant work environment, as best I can describe it.

Q: And this is the work environment from when you began in July of ’03?

A: Yes. Yes.Q: So it’s the entire period of time that you’re talking about?A: Yeah. . . . Q: Was that different than jobs you had held in the past?A: Oh, my goodness, yes. . . . I mean I don’t think there’s another

job like it in the world that you are in, you know, a 24-hour environment, responsible to—to answer questions, escalate. I just don’t think there’s anything like it in the world.

Response: It is undisputed that Mr. Kepas testified, in both the Workers’ Compensation hearing

and the present case, that the underlying tinnitus was caused by environmental stress. (See

Kepas Depo. at 177-78; Labor Comm’n Hearing, October 19, 2006 (“Labor Comm’n Hearing

I”), at 75. A copy of relevant portions of the Labor Comm’n Hearing I is attached hereto as

Exhibit 43.) However, as Mr. Kepas testified in both proceedings, the tinnitus he experienced in

August 2005 was “noninvasive.” (Kepas Depo. at 178; Labor Comm’n Hearing I at 36.) It was

in January 2006, after Mr. Kepas began to suffer increased discrimination and harassment by Ms.

Dutton and Ms. Jones, that he experienced an exacerbation of the tinnitus to such an extent that

the noise in his head was “all-encompassing.” (Kepas Depo. at 179.) This is evidenced by an

email sent by Mr. Kepas to Mr. Bringuel on February 24, 2006, in which Mr. Kepas states:

On February 16th I began a leave of absence from eBay for several reasons. These include, among others: (1) the physical and emotional effects caused by the behaviors of Carolyn Patterson, Wendy Jones and Susan Dutton, which I detailed

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in eBay ethic hotline complaints on January 20th & 23rd; (2) Tinnitus that has significantly increased in severity since the offending behavior of these individuals escalated.

(Email from Mr. Kepas to Mr. Bringuel, dated February 24, 2006 (“February 24, 2006 Email”)

(emphasis added), attached hereto as Exhibit 44.) The Administrative Law Judge ultimately

determined that Mr. Kepas’ injury was not caused by the workplace stress but was instead cause

by “the result of good faith employer personnel actions and alleged discrimination. (Findings of

Fact, Conclusions of Law, and Order at 7, (emphasis added), attached hereto as Exhibit 45.)

Indeed, the Administrative Law Judge found that:

[I]t was not until he was demoted in February 2005 and believed that he was the victim of age discrimination and then, in April 2005, believed he was the ongoing victim of sexual harassment and retaliation, that he exhibited any symptoms of stress related tinnitus. This condition worsened only after eBay management gave the petitioner a negative work evaluation and placed him on a performance improvement plan in February 2006 and also when the petitioner filed complaints of employment discrimination against eBay. Nowhere in the medical records does the petitioner report his source of workplace stress that resulted in tinnitus as being the long hours and demanding work environment of eBay. Further, the petitioner worked in [sic] as eBay manager for almost 2 years in that environment without ever having tinnitus symptoms or the need for treatment for stress. Further, the petitioner, in his claim for damages related to his discrimination claim, includes a damage claim related to tinnitus.

Id. As such, the Administrative Law Judge denied Mr. Kepas’ worker’s compensation claim.

(Id. at 9.)

30. In mid-November 2005, “Ms. Dutton created another ‘supervisor’ position and filled it with Jason Hughes, who was 32 years old.” Ms. Dutton assigned the swing and graveyard shifts to Mr. Hughes; Kepas continued to supervise the day shift.

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Response: Undisputed. Although, based on prior discussions, Mr. Kepas believed that a

supervisor hired for the eWatch Department would report to him, Ms. Dutton structured Mr.

Hughes’ position in such a way as to require Mr. Hughes to report directly to Ms. Dutton,

thereby taking away from Mr. Kepas the supervisory responsibility for one-half of the eWatch

team. (See Kepas Depo. at 116.) Within weeks after Mr. Hughes was hired, Ms. Dutton began

telling Mr. Kepas that he needed to find a new position “to get out from underneath Wendy

Jones’ line of responsibility” because Ms. Jones “hated” Mr. Kepas. (Kepas Depo. at 140, 165.)

Joyce Whalen, a former Director at eBay, testified that she reported to eBay’s Human

Resource Manager at least two incidents in which Ms. Jones, an eBay Vice President, made

ageist statements suggesting that “once you got to a certain age, you were not going to be very

valuable.” (Deposition of Joyce Whalen (“Whalen Depo.”) at 25. A copy of relevant portions of

the Whalen Depo. is attached hereto as Exhibit 46.) Although Ms. Jones was not the Vice

President over the eWatch Department at the time Ms. Dutton replaced Mr. Kepas as the eWatch

Manager, (see Jones Depo. at 11-12), Ms. Jones nonetheless participated in the decision to move

Ms. Dutton to that department. (See November 19, 2004 Email). At the time of the move, Ms.

Dutton was under age 40. (See Dutton Depo. at 11.) Moreover, although Mr. Kepas had

discussed the possibility of bringing in a supervisor to assist with the night shifts but had been

told no, Ms. Jones approved Ms. Dutton’s requisition to hire a supervisor. (See Kepas Depo. at

120.) At the time he was hired as an eWatch supervisor, Jason Hughes was also under 40. (See

Deposition of Jason Hughes (“Hughes Depo.”) at 76. A copy of relevant portions of the Hughes

Depo. is attached hereto as Exhibit 47.)

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31. Ms. Dutton testified that she hired Mr. Hughes because the employees on the eWatch team worked multiple shifts and it was too difficult for one person to effectively supervise and develop those employees. Ms. Dutton also believed the reassignment was beneficial to Kepas in achieving a better work-life balance.

Response: Disputed. It is undisputed that Ms. Dutton did testify that “one of the things I

recognized early on was the need for a work life balance. This is a 24 by 7 and there was just

Manny and myself. And so we were on call, we would switch on call every other week.”

(Dutton Depo. at 314.) It is also undisputed that Ms. Dutton hired Mr. Hughes over nine months

after she became the eWatch Manager. (Hughes Depo. at 10.) However, within just weeks after

Ms. Dutton hired Mr. Hughes, she began telling Mr. Kepas that he needed to find another job

outside of Ms. Jones’ chain of authority because Ms. Jones did not like him and hated him. (See

Kepas Depo. at 140, 165.) And, following up on those conversations, on January 9, 2006, Ms.

Dutton forwarded to Mr. Kepas a job announcement for a position in the TnS Department. (See

Email from Manny Kepas to Jeff Anderson, dated January 31, 2006, attached hereto as Exhibit

48.) Finally, Ms. Dutton structured Mr. Hughes’ position so that he would report directly to her,

thereby reducing Mr. Kepas’ supervisory authority by one-half. (See Kepas Depo. at 116.)

32. Kepas admitted at his deposition that the job of supervising all shifts was “too big for one person.”

Response: Undisputed. Mr. Kepas believed that a supervisor hired would report to him. (See

Kepas Depo. at 116). Ultimately, however, Ms. Dutton required Mr. Hughes to report directly to

her, thereby reducing Mr. Kepas’ supervisory responsibility by one-half. (See id.)

33. Kepas also admitted at his deposition that he agreed with Ms. Dutton’s decision to hire another supervisor.

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Response: It is undisputed that Mr. Kepas believed there was a need to hire a supervisor in the

eWatch Department because “it’s hard to be a manager of a 24-hour team in the true sense of the

word.” (Kepas Depo. at 115.)

34. Kepas actually interviewed the candidates for the new supervisor position (with Ms. Dutton) and agreed that Mr. Hughes was the best candidate for the job.

Response: Undisputed.

35. Mr. Hughes’ assignment resulted in no change in Kepas’ title, duties, or compensation, except that Kepas was thereafter not required to supervise multiple shifts.

Response: Disputed. Ms. Dutton structured Mr. Hughes’ position so that Mr. Hughes would

report directly to her. This meant that Mr. Kepas no longer had any supervisory duties or

responsibility over the employees supervised by Mr. Hughes. (See Kepas Depo. at 116.)

36. In November 2005, the eWatch team participated in a pulse/upward feedback survey (the “Pulse Survey”) to evaluate the effectiveness of team management, including Kepas. Kepas received a score of 29 percent out of 100 percent:

Name Management Practices Index (Average % Favorable For all items)

Trend Q205 Trend Q404

eBay Inc. – Group 83% 0 -Marketplaces North America CS 87% +1 -Salt Lake City 88% +1 -Manny Kepas – Group 29% - -

Response: It is undisputed that the eWatch team participated in a Pulse/Upward Feedback

survey to evaluate the management of the eWatch team. Although the Pulse Survey indicated

that Mr. Kepas’ score was 29%, Mr. Scheuerman stated that it was his understanding and the

understanding of other employees in the eWatch Department that the Upward Feedback Survey

was to be “answered with respect to Ms. Dutton’s performance despite the fact that Mr. Kepas’

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name was on the survey.” (Scheuerman Declaration at ¶ 7.) “This was because in an earlier

survey conducted in the second quarter of 2005, [eWatch’s] director, Mr. Colgan, told [the

eWatch team] that the upward feedback survey was to evaluate Ms. Dutton’s performance rather

than Mr. Kepas’ performance despite the fact that his name was on that survey” and the eWatch

team was “not instructed that the quarter four survey should be treated any differently.” (Id.)

Consistent with Mr. Scheuerman’s statement, the Pulse Survey contained statements concerning

the entire management team, not solely Mr. Kepas. For example, one statement provided

“[p]rior to the management realignment on the team, our direct manager seemed to care for and

try to advance the team as a whole.” (2005 Pulse Survey, at EBI00180, attached hereto as

Exhibit 49.) Another comment provided, “[s]ince a new Manager came to the team, things have

really changed. It’s almost like he has become rather two faced, and plays favorites and foes

with those on the team. . . . I’m not sure if this is due to Susan or Manny or what, but it’s really

affecting everyone.” (Id.) One eWatch team member stated it this way:

1. This has been a very negative year for the team. Management seems to have lost trust in the team, and the team therefore has lost trust in management. 2. Run the team—bringing in a 3rd supervisor/manager for a 12 person team shows lack of management ability—the team would be much more supportive of additional help, rather than more management. . . .

(Id.)

37. Kepas’ Pulse Survey score (29 percent favorable out of 100 percent) was “the lowest in Salt Lake City” and the lowest in the eBay customer support as a whole. Among the many issues raised about Kepas, the eWatch team responded very negatively to statements like, “My manager treats everyone fairly,” “My manager acts consistently with what he/she says,” and “My manager instills a positive attitude in the team, even under difficult circumstances.”

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Response: It is undisputed that Ms. Heitland testified that the Pulse Survey scores were the

lowest in Salt Lake City and that she believed the scores were the lowest in customer support as

a whole. (See Heitland Depo. at 145.) However, as discussed above, it is disputed as to whether

the employees believed that the scores given concerned the entire eWatch management team or

solely Mr. Kepas. (See Response to Statement of Fact No. 36.)

Moreover, many of the negative responses provided in the Pulse Survey are a direct result

of Ms. Dutton’s harassment. For example, although the survey indicated a very low response to

the questions “My manager acts consistently with what he/she says” and “My manager treats

everyone fairly,” Mr. Kepas testified that it was Ms. Dutton that would give him inconsistent

directions. Indeed, Mr. Kepas testified that, on one occasion, Ms. Dutton instructed him to write

up an employee for failing to call in or come to work but then told Mr. Kepas in front of the

employee that he acted inappropriately for preparing the written warning. (See Kepas Depo. at

145-46.) Similarly, Janet Wagner, an eWatch supervisor, testified that Ms. Dutton would send

“mixed messages in terms of handling particular situations, either with people or with process or

with policy or with technology.” (Deposition of Janet Wagner (“Wagner Depo.”) at 11. A copy

of relevant portions of the Wagner Depo. is attached hereto as Exhibit 50.)

Finally, the written comments suggest that Mr. Kepas’ current management style, after

Ms. Dutton began her harassment, varied dramatically from his management style prior to Ms.

Dutton’s arrival. Indeed, one written comment provided stated that “[s]ince a new Manager

came to the team, things have really changed. It’s almost like he has become rather two faced,

and plays favorites and foes with those on the team.” (2005 Pulse Survey at EBI00180.)

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Similarly, another statement provided that “Manny has changed a lot in the last 6 months, and it

feels like he’s alienating his employees. He used to be more approachable and used to make me

feel my input was important when it came to changes/new developments on the team.” (Id. at

EBI00181.) And, one employee stated, “[i]n getting better at working with Management, it

seems he has forgotten about us sometimes. He used to go to battle for us to get us the help we

desperately needed. Of course, management put their foot down on him for that, so who can

blame him for changing positions.” (Id.)

A simple comparison of Mr. Kepas’ 2004 Pulse Survey scores, taken at a time when Mr.

Kepas was the sole manager of the eWatch department, and the 2005 Pulse Survey scores

supports the conclusion that Mr. Kepas’ management style was affected by Ms. Dutton’s

“coaching.” In the Pulse Survey taken during the second quarter of 2004, Mr. Kepas scored

86%. (Upward Feedback Survey Q2 2004.) A second Pulse Survey was taken for the fourth

quarter of 2004, and Mr. Kepas scored 91% for the Management Practices Index, (Upward

Feedback Survey Q4 2004), which, according to eBay’s Senior Director of Human Resources,

was a “good score.” (Bringuel Depo. at 45.)

Furthermore, based on an email from Mr. Hughes, dated August 9, 2007, it is evident that

the concerns raised in the Pulse Survey from 2005 still existed after Mr. Kepas’ departure and

were attributed solely to Ms. Dutton. Specifically, when discussing Mr. Kepas’ complaint

against eBay, Mr. Hughes declared that Mr. Kepas “does point to a working environment that is

not acceptable for most people if they compare us to the rest of the organization and this is

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created by her [Ms. Dutton] in almost all of our opinions.” (Email dated August 9, 2007,

attached hereto as Exhibit 51.)

38. In early December 2005, Ms. Dutton met with Kepas and informed him that “he would probably go on a personal improvement plan because he scored so low [on the Pulse Survey].”

Response: Disputed. Although Ms. Dutton testified that she documents “every conversation

that [she] has with an employee,” (see Dutton Depo. at 65), eBay has not provided any

documentation to show that Ms. Dutton ever informed Mr. Kepas that he would be placed on a

performance improvement plan. Moreover, as evidenced by her notes dated January 12, 2006,

Ms. Dutton actually discussed a Pulse Survey Action Plan with Mr. Kepas. (See Notes dated

January 12, 2006, attached hereto as Exhibit 52.) When asked whether an “action plan” was

synonymous with a “performance improvement plan,” Ms. Dutton testified as follows:

Q. Okay. And you are not saying an action plan, which is referred to a little bit earlier, is consistent with or synonymous with a performance improvement plan?A. An action plan is basically creating goals, mile steps—goals, milestones, and a plan in order to improve whatever Mr. Kepas and I decided he wanted to focus on in the next two quarters.Q. Okay. So it wasn’t synonymous—you are not saying it’s synonymous with the performance improvement plan?. . . .A. No, it’s not the same as a PIP [Performance Improvement Plan], no.

(Dutton Depo. at 379-80 (emphasis added).)

Mr. Kepas testified that he was informed about being placed on a personal improvement

plan by Jeff Anderson, the Human Resources Manager, during the conversation in which Mr.

Anderson relayed to Mr. Kepas the results of eBay’s “investigation” into his complaints. (See

Kepas Depo. at 157-58.) However, even at that time, Mr. Anderson did not inform Mr. Kepas of

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the reasons for the performance improvement plan, nor did he or any other eBay employee ever

present Mr. Kepas with a copy of the plan. (See Kepas Depo. at 158 (“And I again asked him

what [the performance improvement plan was] for. And he told me he didn’t know. That they

would have to get together and figure out what that was and then get back to me.”); see also

Manny Kepas Investigation Summary (“Investigation Summary”) at EBI00007, attached hereto

as Exhibit 53 (“I hold him that his specific performance shortcomings would be addressed with

him by Susan upon her return from PTO.”).) In fact, the evidence shows that no Personal

Improvement Plan was ever created until well after Mr. Anderson’s meeting with Mr. Kepas.

(See Email from Susan Dutton to Jeff Anderson, dated March 6, 2006, attached hereto as Exhibit

54.)

39. On December 27, 2005, Ms. Dutton met with Janna Heitland, an eBay human resources manager, to discuss Kepas’ Pulse Survey score and to see how they could address the issues presented in the survey. Ms. Heitland offered to conduct a “skip-level” meeting with the eWatch team concerning the Pulse Survey results. Ms. Dutton and Ms. Heitland initially decided to conduct the skip-level meeting on January 17, but due to business related conflicts decided to conduct the meeting on January 25.

Response: Disputed. Ms. Heitland testified only that she remembered that she spoke with Ms.

Dutton “about the Upward Feedback Survey” and that they “decided to conduct focus group

meetings with the eWatch team.” (Heitland Depo. at 101-02.) When asked additional questions

about that conversation, Ms. Heitland testified that she did not “recall the specific conversation,

what was said.” (Id. at 101.)

40. Also in December 2005, eBay experienced a serious log-in problem that posed a risk to the operation of the Web site. Kepas admitted to noticing this problem when accessing his own eBay account.

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Response: It is undisputed that Mr. Kepas experienced a glitch in his computer that resulted in

another user’s name being displayed on his screen. (See Kepas Depo. at 142.) However, as

testified to by the eWatch employees, a similar problem has occurred on more than one occasion,

and they believe that the glitch results from the caching of web pages by an Internet Service

Provider to allow the user to bring up an internet page faster. (See Deposition of Darla Godwin

(“Godwin Depo.”) at 33. A copy of relevant portions of the Godwin Depo. is attached hereto as

Exhibit 55; Deposition of Kathleen Silvy (“Silvy Depo.”) at 11-12. A copy of relevant portions

of the Silvy Depo. is attached hereto as Exhibit 56; Deposition of William King (“King Depo.”)

at 22-23. A copy of relevant portions of the King Depo. is attached hereto as Exhibit 57.) Such

a problem does not pose “a security issue.” (Silvy Depo. at 12.) Although Mr. Kepas personally

experienced this issue and discussed it with eWatch team members and Mr. Hughes on

Thursday, (see Kepas Depo. at 143), Mr. Hughes was aware of a report made at least two days

prior to Mr. Kepas’ report. (See Email dated December 17, 2005, attached hereto as Exhibit 58

(“But according to Jason we heard about this on Tuesday (on very small scale—like 1 member)

—then it actually happened to Manny on Thursday, but he didn’t report it.”).)

41. Kepas claims that after he discovered the sign-in problem, he raised the issue with two employees he supervised and with Mr. Hughes, these team members told him it was probably “a glitch in the system,” and then he left. Kepas admits that he did not report the problem outside of eWatch or to any of the managers above him. Kepas also did not open a bug ticket.

Response: When Mr. Kepas first observed the issue, he spoke with Will King, eWatch’s “most

senior tenured analyst,” and asked him to look at the problem. (Kepas Depo. at 143). Mr. King

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indicated that he believed it was “a glitch in the system,” and Mr. Kepas then requested that

Darla Godwin, another senior eWatch team member, look at the issue. (Id.) Mr. Kepas then

informed Mr. Hughes, the eWatch supervisor taking over the next shift, about the issue prior to

leaving. (Id.) Although Mr. Kepas did not report the issue outside of eWatch, Mr. Hughes, as

the supervisor taking over, “could have escalated it” “[h]ad he felt there was something

significant.” (Id. at 144.) Although Mr. Hughes claimed that he did not remember whether Mr.

Kepas informed him of the problem at the time he experienced it, (see Hughes Depo. at 128), he

also testified that Mr. Kepas told him that he had experienced the issue with his personal

account, and Mr. Hughes responded by stating “Let’s make sure it’s on the watch list going into

the next shift . . . or escalate it.” (Id. at 127.)

42. Unfortunately, the sign-in problem was not a glitch, but a “major outage” that took the entire weekend to resolve, almost 24 hours on both days.

Response: Disputed. Although Mr. Kepas, Mr. Hughes, and Ms. Dutton worked various shifts

throughout the weekend to resolve the issue, the eBay site did not experience a “major outage.”

(See Response to Statement of Fact No. 41.) Indeed, Mr. Hughes commented in an email to Ms.

Jones that eBay “had no Level 2 sign Ins.” (Email dated December 17, 2005, attached hereto as

Exhibit 59.)

43. Although Kepas claimed to have raised the issue with certain members of his team before he left eBay after personally discovering the problem on his own computer, eBay’s vice president of customer support for North America, Wendy Jones, the director of the eWatch department, Jon Wakeham, and the manager of the eWatch department, Ms. Dutton, each believed Kepas’ failure to escalate the sign-in problem by opening a “ticket” was a significant performance failure:

Ms. Jones testifies as follows:

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A: Two things bothered me about that incident. The first was it actually physically occurred to [Kepas] and it wasn’t reported. The second is as we were managing the situation which spanned the course of a weekend, for the most part 24 hours a day, a number of different people from eWatch were in lead positions. It got turned over on a Saturday from a gentleman named Jason Hughes to Manny Kepas and when it did it felt like the situation in terms of data surfacing, participation on calls, meeting deadlines in terms on information requests we had and commitments we were making were not being handled well.

. . . . Q: Now, when you say he didn’t report it what did you

mean?A: He didn’t open a ticket.

Mr. Wakeham testified as follows:

Q: Earlier in the deposition opposing counsel asked you some questions about the sign-in issue. . .[Specifically,] what if another employee had discovered the sign-in issue or what if Mr. Kepas had made other employees aware of the sign-in issue.Let’s just assume that those facts are correct for the sake of argument. Would that have affected your opinion as to how Mr. Kepas handled the sign-in issue?A: Not at all. Manny was the manager of eWatch . . . and, as such, was the, you know, was the person responsible for managing the process by which issues like this are identified and reported to, you know, the proper teams who can take care of those issues.The fact that two days – a full two days prior to the issue being reported to the proper people who could fix it, that Manny had seen this issue personally and not reported it meant, you know, that was the key issue for me. The fact that he was the manager of the department that’s responsible for reporting those issues, had seen it himself, and didn’t report it. So that meant more to me than whether someone knew about it beforehand prior to Manny.

4816-0212-7106/KE007-001 xxxiii

Ms. Dutton testified as follows:

Q: Now if Manny had reported it to others on the team that he saw it, and they didn’t open a ticket, then who would be to blame?. . . .A: Manny’s leadership in – when you sign into your account and pull up someone else’s account information, that’s a huge security breach. He is – he was a manager of eWatch. He knew it was a security breach. He should have taken the leadership opportunity to investigate the problem. If he did report it to other people, which was not the communication that I received, then he did not – he had a lack of follow-up. He didn’t follow up. He didn’t – he didn’t look over his people’s shoulders. He didn’t ask what was going on. He didn’t say “let’s test a few accounts. Lets look at the boards. Let’s contact members. Let’s do this, do that.” He saw it and left it.

Response: Disputed. Although Ms. Dutton now claims that Mr. Kepas’ failure to file a bug

ticket was a performance problem, her actions at the time of the incident belie such a claim. For

example, in contrast to her testimony, Ms. Dutton actually gave Mr. Kepas a rating of 101%,

meaning Mr. Kepas exceeded expectations, on a category that specifically referenced Mr. Kepas’

handling of the sign-in issue. (See Individual Performance Plan & Review Q4 2005 at 2.)

Moreover, although Ms. Dutton attributes a part of Mr. Kepas’ performance deficiency to the

fact that he “never asked any of the team to look at the issue as far as [she] was aware,” ( see

Dutton Depo. at 215), it is undisputed that Ms. Dutton received an email on December 17, 2005,

in which Ms. Jones stated that Mr. Kepas showed the problem “to colleagues.” (See Email dated

December 17, 2005, attached hereto as Exhibit 60.)

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In support of their claim that Mr. Kepas’ failure to file a bug ticket was a performance

problem, Mr. Wakeham and Ms. Dutton imply that Mr. Kepas should have reported the issue

because he was a manager of eWatch. (See Deposition of Jon Wakeham (“Wakeham Depo.”) at

75-76. A copy of relevant portions of the Wakeham Depo. is attached hereto as Exhibit 61;

Dutton Depo. at 223-24.) However, Mr. Hughes shared the supervisory responsibilities with Mr.

Kepas. Indeed, Mr. Hughes testified that he was a “peer[]” of Mr. Kepas and that he was hired

to supervise the swing and night shifts while Mr. Kepas managed the day shift. (Hughes Depo.

at 76, 114.) And Mr. Kepas reported the issue to Mr. Hughes during the change in shifts.

(Kepas Depo. 142-44.) According to Ms. Jones, “[i]f anyone on eWatch physically saw this

error themselves and didn’t open a ticket, I would be extremely concerned.” (Jones Depo. at 39.)

Yet, eBay has produced no evidence to show that the eWatch employees who were notified of

the problem by Mr. Kepas, including Mr. Hughes, were placed on a performance improvement

plan for their failure to escalate the issue.

In addition to Mr. Kepas’ failure to file a bug ticket, Ms. Jones testified that “meeting

deadlines in terms of information requests we had and commitments we were making were not

being handled well” by Mr. Kepas. (Jones Depo. at 34.) However, this concern was addressed

by Ms. Dutton in an email dated December 17, 2005, in which Ms. Dutton stated “I bellive [sic]

the times for the update were incorrectly communicated from me team [sic] thus the delay.”

(Email dated December 17, 2005, attached hereto as Exhibit 62.) This explanation followed an

email previously sent by Ms. Dutton in which she requested additional time to prepare the

timeline so that her department could “ensure the information is accurate.” (Id.) Moreover, Ms.

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Jones publicly thanked Mr. Kepas for his work on this issue, as evidenced by Mr. Kepas’ Fourth

Quarter Performance Review. (Individual Performance Plan and Review Q4 2005 at 2.)

44. In early January 2006, Ms. Dutton informed Kepas that because of the negative feedback from the eWatch team on the Pulse Survey, she was placing two eWatch employees—Clint Erikson and Will King—under her direct supervision rather than Kepas’ supervision.

Response: Undisputed.

45. Ms. Dutton wanted Kepas to focus solely on the nonexempt employees, i.e., the “production people,” which she believed was Kepas’ “circle of influence.” Messrs. Erikson and King were exempt employees at that time and not hourly production employees. Ms. Dutton believed that the change would better enable Kepas to focus on his people management skills and improve his relationships with the production people.

Response: Disputed. After taking over one-half of Mr. Kepas’ direct reports away in November

2005, Ms. Dutton informed Mr. Kepas in January 2006 that he would no longer be the supervisor

over Mr. Ericson and Mr. King and that he could not meet with any employees without her

present. (See Kepas Depo. at 116, 127.) This conversation occurred after Ms. Dutton informed

Mr. Kepas that Ms. Jones had personally attacked him in an email, and Ms. Dutton told Mr.

Kepas on at least two other occasions during January 2006 that Ms. Jones “hated” Mr. Kepas and

that Mr. Kepas needed “to get out from underneath Wendy Jones’ line of responsibility.”

(Kepas Depo. at 140, 165.)

46. Unfortunately, Kepas’ performance continued to deteriorate. On January 13, 2006, Kepas met with Ms. Dutton and one of the employees Kepas supervised, Pat Keller, to issue a disciplinary action for an attendance problem. During the course of the meeting, Ms. Dutton became convinced that Kepas had not adequately investigated the attendance issue, and terminated the meeting. Kepas was counseled for his lack of preparation and attention to detail and Ms. Dutton asked Kepas to apologize to Mr. Keller.

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Response: Disputed. Mr. Kepas testified that an eWatch employee, Patrick Keller, failed to call

in or report to work during one day in January 2006. (See Kepas Depo. at 145.) Rather than

formally discipline Mr. Keller by issuing a write-up for the “no call, no show,” Mr. Kepas simply

chose to speak with Mr. Keller about his absence. (See id. (“But I wasn’t necessarily going to

give him a warning, because I had talked with him about it.”).) However, when Ms. Dutton

learned of Mr. Keller’s “no call, no show,” she directed Mr. Kepas to “get Pat written up for not

reporting to work.” (See id.) After receiving this order from Ms. Dutton, Mr. Kepas verified the

facts and spoke with HR. (See id. at 146.) Ms. Heitland, an HR Manager, then told Mr. Kepas

that he could prepare a written warning. (See id.) During the meeting with Ms. Dutton, Mr.

Kepas, and Mr. Keller to discuss the written warning, Mr. Keller claimed to have sent an email

requesting the day off from work. (See id.) “[Ms. Dutton] then turned the tables on [Mr. Kepas]

and said that [Mr. Kepas] had acted inappropriately by preparing a written warning for [Mr.

Keller].” (Id.) Ms. Dutton apologized to Mr. Keller, dismissed him from the meeting, and then

berated Mr. Kepas for failing to speak with Mr. Keller about the issue previously. ( Id. at 146.)

However, Mr. Kepas explained that he did speak with Mr. Keller prior to the meeting with Ms.

Dutton, and Mr. Keller never mentioned sending an email. (See id.) When asked under oath

whether he sent an email, Mr. Keller testified that “I went and searched for the e-mail, [but] I

couldn’t find it. So either I couldn’t find it or it simply didn’t exist. But there was a failure in

the process on my part. I didn’t get it put on the board, so that was my mistake.” (Deposition of

Patrick Keller (“Keller Depo.”) at 27-28 (emphasis added). A copy of relevant portions of the

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Keller Depo. is attached hereto as Exhibit 63.) Mr. Keller testified that he subsequently

informed Ms. Dutton that he did not send an email. (See Keller Depo. at 28.)

47. On January 20, 2006, Ms. Dutton counseled Kepas for dealing with her in a “hostile nature” concerning the Pat Keller issue.

Response: It is undisputed that Ms. Dutton documented a conversation in which she claimed

that she “apologized to [Mr. Kepas] that he was so upset but advised that [she] had done nothing

wrong and that [she] was sorry if he felt [she] had yelled at him and was mad about [her] pulling

the written warning and having him apologize to Pat.” (Exhibit 22 to eBay’s Memorandum in

Support.)

48. On that same day, January 20, 2006, Kepas made his first complaint to eBay about Ms. Dutton’s alleged improper conduct. According to Kepas’ complaint, Ms. Dutton told a group of employees one week earlier (January 13) that she had injured her back doing a “circle jerk,” which she described as a weight-lifting exercise. Kepas ascribed a sexual meaning to this term and reported it to eBay through an anonymous telephone ethics hotline (the “ethics hotline”).

Response: It is undisputed that Mr. Kepas reported to the eBay Ethics Hotline that Ms. Dutton

came into work “complaining that she had hurt her back. When she was asked what happened,

she responded she had hurt herself while participating in a ‘circle jerk.’” (Alertline Confidential

Memorandum, dated January 20, 2006 (January 20th Complaint”), attached hereto as Exhibit 64.)

Ms. Dutton’s comments were made on the floor of the eWatch Department, and Ms. Dutton

made the comment in a loud voice while laughing. (See Kepas Depo. at 133.) Mr. Ericson

stated that, based on her laugh and the expression on her face when she made the comment, he

“inferred that she clearly understood what the meaning of the term ‘circle jerk’ was.” (Ericson

Declaration at ¶ 7.)

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This was not the first time Ms. Dutton had made sexual comments or innuendo while at

work. (See Response to Statement of Fact No. 27.) Rather, Ms. Dutton would often “blurt” out

comments similar in nature to the one made on January 13, 2006. (Kepas Depo. at 110.) Indeed,

Ms. Whalen, a former eBay Director, testified that she spoke with Tim Paine, Ms. Dutton’s

supervisor at the time, regarding Ms. Dutton’s discussions “with fairly large groups of people” at

work regarding her different plastic surgery procedures, which included “liposuction, something

with her breasts . . ., [and] injections into her buttocks to round those out.” (Whalen Depo. at 9-

10, 45-46, 77-78.) Moreover, eBay’s management was aware of Ms. Dutton’s previous sexually

explicit behavior. Indeed, Ms. Jones, an eBay Vice President, testified that she was present when

Ms. Dutton exposed her breasts at a restaurant in front of several eBay employees. (See Jones

Depo. at 50.) Moreover, Ms. Dutton performed a “lap dance” on a male at an eBay Christmas

party in full view of eBay’s Directors and Vice Presidents. (See Scheuerman Declaration at ¶ 3.)

This event was subsequently described to other directors at eBay. (See Whalen Depo. at 12-13

(“One of my previous employees told me that there was a Christmas party before I joined eBay

that Susan had participated in and had gotten pretty drunk and had been dancing seductively in

front of our –he was the head of technology at the time, Maynard Webb. . . . Q. When you say

dancing seductively, could that be described as a lap dance? A. That’s exactly how it was

described to me.”).)

Although Mr. Kepas’ January 20th Complaint was anonymous, the complaint indicates

that Mr. Kepas had previously discussed the content of his complaint with his Director, Jon

Wakeham. (See January 20th Complaint at 3.)

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49. The January 20 complaint made no mention of a hostile work environment, “quid pro quo” sexual harassment, or age discrimination. The January 20 complaint also made no mention of any improper conduct or comments by Ms. Dutton, other than the “circle jerk” comment.

Response: It is undisputed that Mr. Kepas’ January 20th Complaint did not specifically reference

the terms “hostile work environment,” “quid pro quo sexual harassment,” or “age

discrimination.” However, the complaint specifically stated that Ms. Dutton “made a sexually

harassing remark” and that Mr. Kepas “felt sexually harassed” by the comment. (January 20th

Complaint at 1-2.) Moreover, Mr. Kepas subsequently reported another complaint to the Ethics

Hotline on January 24, 2006, in which he stated that “Wendy Jones is creating a hostile work

environment for him.” (Alertline Confidential Memorandum, dated January 24, 2006 (“January

24th Complaint”), attached hereto as Exhibit 65.) In that complaint, Mr. Kepas informed the

alertline operator of Ms. Dutton’s statements that Ms. Jones disliked and hated Mr. Kepas, and

he requested that eBay “review the emails between [Ms. Dutton] and [Ms. Jones] that pertain to

[Mr. Kepas].” (Id. at 2.)

50. Kepas submitted a second complaint to the ethics hotline three days later—on January 23, 2006. This complaint merely provided more information about the “circle jerk” incident; specifically, it stated that two other employees may have witnessed Ms. Dutton make the comment. Again, the complaint made no mention of a hostile work environment, “quid pro quo” sexual harassment, or age discrimination. The complaint also made no mention of any improper conduct or comments by Ms. Dutton, other than the “circle jerk” comment.

Response: It is undisputed that Mr. Kepas’ second call to the Alertline consisted of a follow-up

to his first call. In that second call, Mr. Kepas stated that two additional eWatch employees “also

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witnessed [Ms.] Dutton’s comment.” (Alertline Confidential Memorandum, dated January 20,

2006, at 2, attached hereto as Exhibit 66.)

51. Kepas submitted a third complaint to the ethics hotline on January 24, 2006. In this complaint, Kepas alleged that Ms. Dutton told him on a few occasions that Ms. Jones disliked or hated him, and that Ms. Dutton had placed two eWatch employees under her supervision (Messrs. Erikson [sic] and King), rather than Kepas’ supervision. Finally, Kepas alleged that Ms. Jones pointed out in a meeting of eBay employees that Kepas was not present. He claims Ms. Jones did this to embarrass him in front of his peers.

Response: Undisputed. Mr. Kepas informed the Ethics Hotline Operator that “Wendy Jones is

creating a hostile work environment for him.” (January 24 th Complaint at 1.) Mr. Kepas also

reported that Ms. Dutton informed him on at least three occasions that Ms. Jones dislikes or hates

him and that Mr. Kepas “need[s] to post for a position outside of the customer service

department so that [he] is out of [Ms. Jones’] line of authority.” (Id.) Mr. Kepas also reported

that, at the time Ms. Dutton reassigned two employees to her, “she began to tell [Mr. Kepas] that

she did not understand why [Ms. Jones] dislikes him.” (Id.) Additionally, Mr. Kepas reported

that, on January 11, 2006, Ms. Jones called on Mr. Kepas when he was not present in what Mr.

Kepas believed was an attempt to “embarrass him in front of his peers.” (Id. at 2.)

Mr. Kepas also informed the Ethics Hotline Operator that he had informed Mr. Wakeham

of his complaints and concerns on January 19, 2006. (Id.) Finally, Mr. Kepas requested that

eBay review the emails between Ms. Dutton and Ms. Jones to determine whether “there is [sic]

any inappropriate emails or conversations between the two managers.” (Id.)

52. The January 24 complaint did not allege that Ms. Dutton was creating a “hostile work environment,” nor did it mention any alleged “quid pro quo” sexual harassment or age discrimination. The January 24 complaint also made no

4816-0212-7106/KE007-001 xli

mention of any improper conduct or comments by Ms. Dutton, other than reassigning two members of his team (Messrs. Erikson [sic] and King) to her supervision.

Response: Disputed. Although the January 24th Complaint did not expressly state that Ms.

Dutton was subjecting Mr. Kepas to a hostile work environment, it did specifically address some

of Ms. Dutton’s inappropriate comments and harassing behavior, such as telling Mr. Kepas that

Ms. Jones hated him and that he needed to obtain a position outside of Ms. Jones’ authority. ( Id.

at 1-2.) That eBay recognized the hostile work environment claim is clearly shown in an email

from Mr. Bringuel to Mr. Anderson, in which he forwarded the January 24 th Complaint with the

caption: “This one is gonna be messy.” (Email from Mr. Bringuel to Mr. Anderson, dated

January 24, 2006, attached hereto as Exhibit 67.)

53. Kepas made a fourth complaint to the ethics hotline on January 31, 2006. In this complaint, Kepas stated that he had met with Ms. Dutton in a one-on-one and that Ms. Dutton told him that “there was a lot of tension between them.” Kepas also stated that, after the meeting with Ms. Dutton, Mr. Hughes told Kepas that Ms. Dutton had asked him to “monitor” Kepas’ activities.

Response: It is undisputed that Mr. Kepas made another follow-up call to his initial January 20th

Complaint on January 31, 2006. (See Alertline Confidential Memorandum, dated January 31,

2006, attached hereto as Exhibit 68.) In this follow-up call, Mr. Kepas stated that he believed

Ms. Dutton knew he called the Ethics Hotline and had instructed Mr. Hughes to monitor him as a

“form of retribution.” (Id. at 2.)

Although Mr. Hughes denied being asked to “spy” on Mr. Kepas, Mr. Ericson declared

under criminal penalty that Mr. Hughes admitted that, “just prior to Mr. Kepas’ leaving, Susan

Dutton told him to watch what Mr. Kepas was doing and report back to her on his activities.”

4816-0212-7106/KE007-001 xlii

(Ericson Declaration at ¶ 11.) Moreover, Mr. Hughes himself testified in the Labor Commission

proceeding that Ms. Dutton told him to “collaborate together and work together with [Mr.

Kepas]” but also report any feedback or concerns that he had about Mr. Kepas to her. (Labor

Commission Hearing, December 18, 2006 (“Labor Comm’n Hearing II”), at 86. A copy of

relevant portions of the Labor Comm’n Hearing II is attached hereto as Exhibit 69.) Based on

the documents produced by eBay, it appears that Mr. Hughes’ “reports” to Ms. Dutton of

“feedback” or concerns regarding Mr. Kepas began on January 26, 2006, when Mr. Hughes sent

an email to Ms. Dutton entitled “Follow up issues for One on One—Manny.” (Email from Jason

Hughes to Susan Dutton, dated January 26, 2006, attached hereto as Exhibit 70.) Although Mr.

Hughes stated that Ms. Dutton told him to “collaborate . . . and work together with [Mr. Kepas],”

Mr. Hughes did not copy Mr. Kepas on that email. (Id.) Mr. Hughes sent a second email on

January 27, 2006, entitled “More feedback for Manny One on One.” (Email from Jason Hughes

to Susan Dutton, dated January 27, 2006, attached hereto as Exhibit 71.) Again, Mr. Hughes did

not copy Mr. Kepas on the email. (Id.)

Ms. Pigott, an eWatch employee, testified that she experienced a similar situation in

which Ms. Dutton solicited feedback from Mr. Hughes. Ms. Pigott was hired to work as the

eWatch Project Manager. (See Deposition of Jessica Pigott (“Pigott Depo.”) at 38. A copy of

relevant portions of the Pigott Depo. is attached hereto as Exhibit 72.) However, when Ms.

Dutton continued to “yell orders at [Ms. Pigott] as if [she] was an administrative assistant,” Ms.

Pigott requested that Ms. Dutton discontinue the practice. (Id.) Thereafter, Ms. Pigott felt like

Ms. Dutton “tried to find . . . every little thing that [she] may have slipped up on to give [her]

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feedback on.” (Id. at 38-39.) Moreover, Ms. Dutton enlisted the aid of Mr. Hughes to gather the

feedback but then made it appear as if the feedback was provided by Mr. Hughes unsolicited.

Indeed, Ms. Pigott testified that:

Later that afternoon I had a one-on-one with Susan. Susan in my file it looked like she was reading paragraphs of things, and she said to me that, “Jason gave me this feedback to give to you,” as she was going through the paragraphs.

I took all the feedback and I wanted to make sure that the lines of communication between me and Jason were open because he was my peer and I value his opinion. So I asked him if he was comfortable in giving me feedback and he said yes. And I said, “Then I don’t understand why Susan was giving me feedback on your behalf.” And he said, “What are you talking about?” And that’s when I said, “Well, in my one-on-one she was reading paragraphs” and Jason stated that Susan pursued him, like solicited the feedback from him to give to me, where she presented it to me in a negative fashion that Jason, you know, was giving me this feedback through her.

(Id. at 52-53.)

At the time of Mr. Kepas’ January 30th Complaint, eBay was aware of Ms. Dutton’s past

attempt to retaliate. (See Jeff Anderson’s Notes of Investigation, attached hereto as Exhibit 19.)

54. The January 31 complaint made no mention of a “hostile work environment” or “quid pro quo” sexual harassment. The complaint also made no mention of any improper conduct or comments by Ms. Dutton, other than allegedly asking Mr. Hughes to monitor Kepas’ activities.

Response: Disputed. The January 31st Complaint expressly stated that Mr. Kepas believed that

Ms. Dutton had asked Mr. Hughes to monitor his activities as “a form of retribution” for his

January 20th Complaint. (Alertline Complaint, dated January 31, 2006, at 2.)

55. In late January 2006, as a follow-up to the Pulse Survey conducted in November 2005, the eWatch employees participated in a “skip-level meeting” with Ms. Heitland (an eBay human resources manager) in order to get more information

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on why the Pulse Survey scores were so low. At the meeting, team members supervised by Kepas made the following comments (noted by Ms. Heitland):

Manny micromanages insignificant things. They write emails, and he asks them to change the font or color, reformat, and re-send. Team feels he is too particular about the things that don’t really matter.

Manny tends to not listen. They feel he doesn’t have the technical knowledge to do the

job. They feel he doesn’t have the confidence to be their leader. Although they appreciate his desire for accuracy, they find it

odd that he asks the team to proofread most emails before he sends them out.

Some team members feel he is demeaning because he tells them to call him and ask permission before they can send out emails, no matter how insignificant the emails are.

Although Manny looks for validation and solicits feedback, he is not receptive to the feedback once it’s given. Instead he becomes ornery and defensive. He’ll say, “You’re telling me how to manage.”

He doesn’t answer the phone when he’s on call. Per Manny’s instruction, an employee called his cell phone,

waited two minutes and called his home phone. The employee left messages on both phones. Manny then accused the employee of not calling. He said, “my wife was home- she would have picked up.” The employee told Manny about the messages left, and he said, “We’ll see about that.” He never did apologize.

Manny does not always practice judgment in communicating. For example, he introduced Gabi as the team’s secretary to Andrea Farkin. Manny did apologize for that mistake to Gabi.

Manny’s communication tends to be awkward. He addressed an employee, “You said something bad about somebody.” The employee said, “what did I say?” Manny then said, “I can’t tell you.”

During the Pulse survey, Manny said, “I should be giving out 5s in my survey, because if I have a problem with my manager, I’d tell him/her.” He kept repeating it over and over.

4816-0212-7106/KE007-001 xlv

Manny announced a person’s paygrade in front of everyone. The individual told Susan about it.

When giving constructive feedback, he isn’t accountable to his own opinions and passes the buck. He’ll say, “Susan doesn’t like that” or “Susan told me I had to.”

The team feels they have to go to Susan to get anything done. The team does not like it that Manny has communicated his

belief that no one can score a “5” on the yearly review. The team believes that his confidence was shot when he was

demoted. The team feels like Manny doesn’t even have the confidence

to make a simple decision without Susan. At the same time, he doesn’t trust the team to make decisions. The team feels they can explain the technical reasons to

Susan for a decision and she’s fine with it. You can’t do that with Manny because he doesn’t have the confidence. He also doesn’t understand a lot of the technical concepts.

The team feels that Manny is not being himself – he’s just trying to act like a leader that he thinks other people want him to be, but he’s not using his personal style.

The team believes Manny micromanages because he is insecure and doesn’t understand all of the measures that have been put into place. But it comes across like Manny just doesn’t want to take responsibility for his actions of decision.

The team feels that “the more his spirit breaks, the worse he becomes.”

The team said, “He’s trying to be something he’s not.” They feel that he’s just not a great fit for eWatch, but he

would probably be good somewhere else.

Response: It is undisputed that Ms. Heitland conducted a skip-level meeting with the eWatch

members on January 25, 2008. Although eBay’s Investigation Summary indicated that Ms.

Heitland interviewed the eWatch team members pursuant to the Investigation of Mr. Kepas’

complaints, (see Investigation Summary at EBI00002), it is also undisputed that Ms. Heitland

never asked any of the eWatch team members about Mr. Kepas’ sexual harassment complaint.

(See Heitland Depo. at 114.) Indeed, although the initial drafts of the Investigation Summary

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indicated that Ms. Heitland’s interview with the eWatch employees consisted of “Skip Level

meetings,” a handwritten notation, presumably made by Jeff Anderson, struck out reference to

the skip level meetings, inserted “Interview of eWatch,” and directed the author to “take out all

skip level replace with interviews.” (Draft of Manny Kepas Investigation Summary at

EBI01416, attached hereto as Exhibit 73.)

Many of the comments received from the eWatch team about Mr. Kepas were the result

of Ms. Dutton’s harassment of Mr. Kepas. As Mr. Kepas testified, Ms. Dutton would give

inconsistent directions that affected his ability to manage his team. For example, Mr. Kepas

testified that, on one occasion, Ms. Dutton instructed him to write up an employee for failing to

call in or come to work but then told Mr. Kepas in front of the employee that he acted

inappropriately for preparing the written warning. (Kepas Depo. at 145-46.) Similarly, Janet

Wagner, an eWatch supervisor, testified that Ms. Dutton would send “mixed messages in terms

of handling particular situations, either with people or with process or with policy or with

technology. There were certain things that she approved of, but then in another context or at

another time, she would be disapproving of those.” (Wagner Depo. at 11.)

Due to Ms. Dutton’s interference and harassment, Mr. Kepas testified that he was no

longer able to rely on his own judgment when rating his employees and determining whether an

employee should be promoted. For instance, although Mr. Kepas felt it was “inappropriate” to

promote one eWatch employee from a Level 1 to a Level 3, Ms. Dutton persisted in suggesting

that the promotion occur. (Kepas Depo. at 104.) When Mr. Kepas ultimately followed Ms.

Dutton’s suggestions, there began to be “a lot of tension on the team because it was the first time

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someone had gone from a Level 1 to a 3.” (Id.) Moreover, Mr. Kepas testified that, once Mr.

Hughes was hired, Ms. Dutton told Mr. Kepas that the reviews of his employees would be done

by “consensus management.” (Id. at 105.) As a result of this “consensus management,”

although Mr. Kepas believed that Mr. Watz should receive a “three” rating on his annual review,

meaning that he meets expectations, Ms. Dutton and Mr. Hughes determined that Mr. Watz

deserved only a “two,” meaning that Mr. Watz was performing below expectations. (Id. at 106-

07.)

In addition to the comments received about Mr. Kepas, the eWatch team also expressed

their concerns about Ms. Dutton in the Skip Level Meeting. In particular, the team stated:

Susan has instituted a less flexible attendance policy, but of some [sic] the team thinks she has not explained why. Since Susan has came [sic], some people feel like they have gone from specialists to micro-managed reps. Some team members do not understand why some people get promotions and others don’t. Certain team members think Susan needs to learn the more technical side of eWatch.. . . . Some team members feel there is a lack of honest communication, some feel the communication is great from Susan. They feel Susan should spend some time on the graves, so she understands more of what happens at night.

(Skip Level Meetings, dated January 25, 2006, attached hereto as Exhibit 74.)

Finally, in contrast to the eWatch employees’ comments in the Skip Level Meeting,

which occurred after Ms. Dutton was put in as Mr. Kepas’ manager, regarding Mr. Kepas and the

change in his management style, the eWatch team made the following anonymous comments on

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Mr. Kepas’ Upward Feedback Survey for the fourth quarter of 2004, just prior to the change in

management:

Please provide you thoughts on this person’s top 2 or 3 strengths as a manager.

1. Excellent at listening to concerns of individuals. Very clear about not just what we’re doing that should be changed, but what we’re doing right. Acts quickly to make changes whenever necessary—very flexible.

2. Manny has a great vision for team expansion and ideas for making the team more productive and efficient. Manny has great communication and is understanding when faced with problems that eWatch continues to run into while running short staffed.

3. Manny includes everyone in team meetings and solicits everyone’s input. He is an effective communicator, and doesn’t ask any more of his team than he is willing to do himself.

4. Manny is highly respected. He treats all employees in a fair and ethical manner. He gives immediate (and correct) answers in a prompt manner and is someone you can trust with a personal or confidential problem or bring up an issue with.

5. Manny is the best manager I have ever worked for, he listens to his team, he does everything he can for every member of the team, he is always available no matter what. If eBay had a company full of people in management like Manny, I would never leave eBay and would retire from here. I would recommend it as a place to work and do business to everyone I met, I would in effect being [sic] the worlds largest eBay supporter.

6. Manny is very good at addressing complex issues that affect our team along with other teams and departments. He provides a sense of vision, of long-term goals for the team and the team’s development worldwide. He is fair in his assessment of team member performance and how each person can improve. He also encourages a friendly working environment.

7. Manny is a rare find and has been an outstanding manager for the eWatch Team. He works very hard to help us work to our maximum potential, and stands up for the needs of our team. Our prior manager and supervisor had a tendancy [sic] to take on more duties than we had the bandwidth to handle, without requesting the support and headcount to allow for successful implementation. Manny has now had to take on repairing those mistakes, and has gone out of his way to repair our workflow to a more logical and reasonable level.

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8. Unline [sic] alot of other sups/leads I’ve had, Manny treats us with respect and like adults. He holds us accountable and lets us know what we’re doing incorrectly in a positive way—as in here’s what happened, here’s how to do better. This means I always feel like I know where I stand—and makes him more approachable as a leadership figurehead.

Please provide your thoughts on this person’s top 2 or 3 areas for development as a manager.

1. I would like to see more feedback about what skills I need to develop in order to meet my career goals at eBay. I really love the self-direction and feedback on the job, but I would like to know about my personal weaknesses as well.

2. Manny needs his management to better understand the goals and responsibilities pressed on eWatch throughout the company so that they can help him increase team staffing and find the right people for the job.

3. Manny needs to come up with new ways to improve overall team attitude.4. None, I only wish there were 2 of him.5. The only failing Manny has is that he is only one person, shackled by the

ceiling over his current position as manager. This would naturally be solved if he was made a Director or VP and remained head of eWatch.

6. a) He needs to relax—I know that his job and ours are very stressful—and he spends a lot of time pushing back on things that we just don’t have the manpower to do. We as a team know that he fights for us constantly, and all together feel that he is one of our greatest assets. We know when he’s having a bad day, and hey you know, if my one on one doesn’t get done this half hour, it’s not the end of the world. Don’t worry—you’re open enough about it if I mess up that while I like one on ones, I know you will tell me when it happens instead of just letting it sit for a month—in this I think we all feel that you can relax a little bit.

(Upward Feedback Survey Q4 2004 at 2-3).

56. Many members of Kepas’ team who participated in the Pulse Survey testified at their deposition that Kepas’ performance as a manager was deficient:

Suzanne Strong (eWatch team member) testified as follows: “Q: Were you present during the skip level meeting that was conducted in January 2006 with Janna Heitland [concerning the Pulse Survey]? A: Yes, I was. . . . [Clint Erikson] talked most of the time. . . . Q: What did he say? A: He was livid

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with Manny, with Manny’s management style, with the way Manny treated him, characterized it as demeaning. He was very angry. . . . I agree with him. I do agree with him”

Will King (eWatch team member) testified as follows: “My feeling was that there were often times when there were emails to be sent out to the company concerning site issues and Manny would have me and other people on the team read those, make sure that they were all correct. This was long after he joined the team. And I felt there should have been a point at which that wasn’t necessary for the team to be reading every one of his emails before he sent them out.”

Scott Berger (eWatch team member) testified as follows: “A: [Kepas] still became very inconsistent. . . . A lot of that was when he first started managing, it felt like well, he was new to the role, give him some time to adjust, things will get better. And as time progressed, nothing really changed. Q: Okay. A: It always seemed like he was still kind of new to the role and still really didn’t know what was going on and still needed the team to double check and proofread everything he sent.”

Phil Watz (eWatch team member) testified as follows: “Q: In December of 2005 and January of 2006, what was your opinion of Mr. Kepas as a manager? A: I would have to say that his lack of technical abilities, skills . . . kind of led him to micromanage everything. . . . Q: Okay. Would you say that it was your opinion that Mr. Kepas lacked the confidence that was necessary to be an effective leader? A: I think again, because of . . . his lack of computer skills . . . it led him to a lot of the time second guess himself, and because of that . . . he possibly made some inappropriate decisions.”

Response: Disputed. Ms. Strong agreed only to the fact that she believed Mr. Kepas’

instruction to the eWatch team that it use a uniform font was “demeaning.” (Strong Depo. at 30

(“Q. But it’s demeaning for your employer to ask you to do it in a different color? . . . A. Clint

classified it as demeaning. You would probably have to ask him. Q. I thought you were saying

it was demeaning? A. I agree with him. I do agree with him.”.) Moreover, Ms. Strong also

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testified that, after Ms. Dutton became the manager of eWatch, she noticed a change in Mr.

Kepas’ style of management. She testified that “[h]e started to micromanage some things that

were fairly inconsequential. That was probably the first change I noticed.” (Id. at 11.) And, as

discussed above, Mr. Kepas’ change in management style was a direct effect of the harassment

he received from Ms. Dutton. (See Responses to Statement of Fact Nos. 37, 46, and 55.)

Moreover, although Mr. King testified that he “read a number” of emails sent to

management, he also testified that it is important that the emails sent to management be accurate

because they are informing management “about what’s going on on the site, especially when

there are site problems.” (King Depo. at 20-21.) And, as with Ms. Strong, Mr. King also

testified that, after Ms. Dutton came to eWatch, he noticed a difference in Mr. Kepas’

management of the team, stating that Mr. Kepas “seemed a lot more worried about his actions

and how they would be viewed by upper management.” (Id. at 15.)

Mr. Berger did not testify that his concerns about lack of technical ability were limited to

Mr. Kepas. Rather, it is undisputed that Mr. Berger consistently testified that those concerns

discussed in the Skip Level Meeting were directed at both Ms. Dutton and Mr. Kepas. Indeed,

when asked about the complaints made in the Skip Level Meeting, Mr. Berger testified as

follows:

Q. Did you make any complaints about Mr. Kepas during that skip level meeting?A. I believe I construed complaint to mean something formalized. It was a very informal setting. Probably the general feeling would have been—again I don’t recall the specific statement—but my general feeling would have been we don’t have the technical competence to lead our technical group.Q. When you made that statement, you were referring to Mr. Kepas?

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A. I think it’s probably applicable to both individuals, Mr. Kepas and Ms. Dutton.Q. But is it correct to say that you did not believe that Mr. Kepas had the technical knowledge to be an effective leader at the time.A. Yes.

(Berger Depo. at 41.) And Mr. Berger again testified that “the prevailing theme was just we

don’t have technical competence, someone that’s leading our team that doesn’t fully grasp what

it is we are doing,” and Mr. Berger testified that this statement was directed both at Mr. Kepas

and Ms. Dutton. (Id. at 39.) Moreover, Mr. Berger testified that the purpose of the Skip Level

Meeting held in May 2005, after Ms. Dutton had been made the sole manager of eWatch and Mr.

Kepas had been demoted, was to “discuss concerns that the technical leadership may have not

been sufficient for [the] team.” (Id. at 20-21.) He stated, “even with the two leaders essentially

running the team, Susan as a manager, Manny as a supervisor, we didn’t have the leadership that

our technical group needed.” (Id. at 42.) Finally, referring to Ms. Dutton, Mr. Berger testified

that “[h]er technical competence was most—most probably a concern.” (Id. at 38.)

As to Mr. Kaufman’s testimony, the isolated statement quoted by eBay, when read in

context, demonstrates that Mr. Kepas’ management style changed after Ms. Dutton came to

eWatch. Mr. Kaufman’s testimony reads as follows:

Q. Now, did you notice any difference in the way Manny was managing after Ms. Dutton became the manager of eBay—eWatch? I’m sorry.A. Yes.Q. And what was the difference?A. I believe that his confidence levels had dropped significantly and his management still became very inconsistent.

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(Deposition of Bryan Kaufman (“Kaufman Depo.”) at 15. A copy of relevant portions of the

Kaufman Depo. is attached hereto as Exhibit 75.) Mr. Kaufman also testified that he “didn’t

really see much of” Ms. Dutton’s management style “because it was filtered through Manny.”

(Id. at 13.) Finally, Mr. Kaufman testified that, during the May 2005 Skip Level Meeting, which

took place after Mr. Kepas was demoted and before he was promoted back to Manager, the

eWatch team “discussed concerns about—about the way the team was being managed by both

Manny and Susan and that we talked to Chris [Colgan] about what we could do to better come to

an agreement between the team and management.” (Id. at 14.)

Mr. Watz’ above-quoted testimony, read in its entirety, is as follows:

Q. In December of 2005 and January of 2006, what was your opinion concerning Mr. Kepas as a manager?A. I would have to say that his lack of technical abilities, skills, he’s not a techie, from what I have seen, kind of led him to micromanage everything to the point where he would, for example, solicit help from the team, okay, what usually would happen if this, this, and this go on or go wrong or whatever? And we in turn would say, ‘Okay, well, this and this goes wrong, this is the usual outcome.’ So would he [sic] rely on everybody on the team to give input.Q. Okay. Did you feel like Mr. Kepas lacked the necessary technical skills to do his job effectively?A. I would have to say yes. Simply put, the job—the job does require a bit of technical abilities, eWatch in particular, because of what we do and what and who we deal with. So without having some sort of computer background, computer skills, it can be very difficult for anybody. And like I said, Manny just didn’t have those skills.Q. Okay. Would you say that it was your opinion that Mr. Kepas lacked the confidence that was necessary to be an effective leader.A. I think again, because of, like I said, his lack of computer skills, being a geek, if you will, it led him in a lot of times to second guess himself, and because of that, I think—I won’t say that he necessarily made a bad—or the wrong decision, but he possibly made some inappropriate decisions.

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(Deposition of Phil Watz (“Watz Depo.”) at 42-43. A copy of relevant portions of the Watz

Depo. is attached hereto as Exhibit 76.) It should be noted that this testimony concerned Mr.

Kepas’ performance after December 2005, which is after Ms. Dutton increased her level of

harassment toward Mr. Kepas. In contrast, Mr. Watz testified that he did not believe that Ms.

Dutton should have replaced Mr. Kepas in February 2005 because he “didn’t see that anything

was going wrong,” and the department was running “[a]s smooth as can be.” (Id. at 10-11.)

In contrast to the eWatch employees’ comments about Mr. Kepas and his change in

management style after Ms. Dutton was put in as his manager, the eWatch team’s anonymous

comments on Mr. Kepas’ Upward Feedback Survey for the fourth quarter of 2004 were highly

favorable and supportive of Mr. Kepas’ management skills. (See Response to Statement of Fact

No. 55.)

57. On February 2 and 3, 2006, Ms. Dutton met with the various members of her team and apologized for use of the term “circle jerk” and any resulting offense. Ms. Dutton stated that she was unaware of any sexual connotation to the term.

Response: It is undisputed that, after Ms. Dutton admitted to making the “circle jerk” remark on

the floor of the eWatch department, she apologized to the team. (See Investigation Summary at

EBI00003-00004.) Although Ms. Dutton claimed that she was unaware of any sexual

connotation to the term, eBay did not interview any of the eWatch employees who were witness

to the comment to determine the context in which Ms. Dutton made the statement. (See id. at

EBI00004; Heitland Depo. at 114.) Mr. Ericson stated that, based on Ms. Dutton’s laugh and the

expression on her face, he “inferred that she clearly understood what the meaning of the term

‘circle jerk’ was.” (Ericson Declaration at ¶ 7; Kepas Depo. at 134.)

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58. On February 6, 2008, Kepas sent an email to Jeff Anderson alleging that “[Ms. Dutton] attempted, against company policy, to distribute [his] stock options to other people.”

Response: It is undisputed that Mr. Kepas sent an email to Jeff Anderson, HR Manager, on

February 6, 2006, in which he requested that, “[g]iven the present situation,” Mr. Anderson

review the stocks awarded to Ms. Dutton’s reports because ‘Susan Dutton awarded amounts that

would have been allocated to myself as manager to my reports.” (Email from Jeff Anderson to

Manny Kepas, dated February 7, 2006, at 2, attached hereto as Exhibit 77.) Mr. Kepas testified

that he first learned of the attempted stock allocation when Ms. Dutton approached him and told

him to enter in the allocations for each employee. (See Kepas Depo. at 150.) When Mr. Kepas

reviewed the allocation, he informed Ms. Dutton that, due to eBay’s allocation policy, only a

certain number of stock options could be allocated to hourly employees and analysts. (Id.) Mr.

Kepas told Ms. Dutton that her allocation was “outside policy” and that “[t]here are not enough

stock options assigned to the team for me to do what you are asking me to do.” (Id. at 150-51.)

Ms. Dutton responded by stating, “[w]ell, there is now.” (Id. at 151.) Based on the fact that Mr.

Kepas already believed Ms. Dutton was harassing him for reporting the complaints, he sent the

email to Mr. Anderson, requesting a review of the allocation. (Id.)

59. Ms. Dutton, however, never attempted to distribute Kepas’ stock options to other people. Rather, Ms. Dutton unintentionally attempted to distribute the pool of options allocated to Kepas’ team in a manner inconsistent with eBay policy.

Response: Disputed. Mr. Kepas testified that he explained the policy and the limitations of

eBay’s allocation guidelines to Ms. Dutton but that she chose to ignore those parameters. (Id. at

150.) When Mr. Kepas told Mr. Dutton that “[t]here are not enough stock options assigned to

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the team for me to do what you are asking me to do,” Ms. Dutton simply responded by stating,

“[w]ell, there is now.” (Id. at 151.)

At the time of Mr. Kepas’ email to Jeff Anderson, Mr. Anderson was aware of Ms.

Dutton’s history of attempting to retaliate against, at the very least, one employee. Indeed, in

2004, Mr. Anderson received complaints from an employee that had given Ms. Dutton negative

comments in an Upward Feedback/Pulse Survey. Mr. Anderson interviewed the complainant,

Josh Sumner, and he informed Mr. Anderson that he overheard a call between Ms. Dutton and

another employee, Shawn Lindberg, during which Ms. Dutton informed Mr. Lindberg that she

had received a low score on the Pulse Survey and that her supervisor, Mr. Salvatierra, was upset.

(See Jeff Anderson’s Notes of Investigation, attached hereto as Exhibit 19.) Ms. Dutton then

proceeded to name off the five employees that reviewed her and stated that she “knew that

Garrett didn’t leave it, that you (Shawn) didn’t leave it, so it must have been Josh because he has

been on edge lately.” (Id.) When Mr. Anderson interviewed Mr. Lindberg, he confirmed the

account of the phone conversation. (Id. at 2.) Although Ms. Dutton claims that she was

attempting to identify the employee so that she “could meet with the person and find out what I

could do better,” (Dutton Depo. at 104), Mr. Lindberg stated that, during the time period of the

Pulse Survey, Ms. Dutton “reminded him to fill out the [Pulse] survey, but cautioned that ‘shit

rolls down hill, so give me a good survey.’” (Jeff Anderson’s Notes of Investigation at 2.)

In her deposition, Ms. Dutton denied that she ever spoke with HR about this issue,

(Dutton Depo. at 106); however, based on Mr. Anderson’s notes, Mr. Anderson spoke with Ms.

Dutton and specifically informed her that Mr. Sumner “was very worried about retaliation in

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reference to the move he will be making to Mark Hilliard’s group.” (Jeff Anderson’s Notes of

Investigation at 2.)

Ms. Pigott testified of similar acts by Ms. Dutton, stating that she experienced increased

“feedback,” which she felt was not constructive, from Ms. Dutton after she asked Ms. Dutton to

refrain from “yelling orders” at her on the floor. (Pigott Depo. at 38-39.) Ms. Pigott testified

that she felt like Ms. Dutton “tried to find . . . every little thing that [she] may have slipped up on

to give [her] feedback on.” (Id.) Moreover, Ms. Dutton enlisted the aid of Mr. Hughes to gather

the feedback, but then made it appear as if the feedback was provided by Mr. Hughes

unsolicited. (Id. at 52-53.)

In 2007, Ms. Pigott spoke with Mr. Hughes about her complaints regarding Ms. Dutton

and the treatment she had been receiving from Ms. Dutton. (See Email from Jason Hughes to

Jeff Anderson, dated August 9, 2007.) When Mr. Hughes suggested that Ms. Pigott relay her

complaints and concerns to Ms. Heitland, the HR Manager assigned to the eWatch department,

Ms. Pigott indicated that she did not feel comfortable speaking with Ms. Heitland because “she

feels that [Ms. Heitland] is [Ms. Dutton’s] friend because of the Bootcamp thing.” (Id. at 2;

Pigott Depo. at 41.) Indeed, Ms. Pigott testified that she did not want to speak with Ms. Heitland

about Ms. Dutton because she felt that Ms. Heitland would have shared that information with

Ms. Dutton. (See Pigott Depo. at 42.) Ms. Pigott’s based her belief that Ms. Heitland and Ms.

Dutton were friends on the fact that Ms. Heitland and Ms. Dutton shared a pass to an exercise

class called “Boot Camp,” and Ms. Heitland had “friend type level” discussions with Ms. Dutton

while at her desk. (Id. at 41.)

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After Ms. Pigott reported additional concerns that she may be retaliated against by Ms.

Dutton for her failure to comply with Ms. Dutton’s request that she delete emails in Ms. Dutton’s

inbox, Ms. Pigott believed that Ms. Dutton became aware of her complaints. In an email sent to

Mariele Weber, the Director of Human Resources for eBay North America, Ms. Pigott asked

whether Ms. Weber “or someone else in HR spoke with [Ms. Dutton] regarding” Ms. Pigott’s

concerns because “[y]esterday afternoon and all day today Susan was acting abnormally peculiar

towards me (almost like I am invisible).” (Email from Mariele Weber to Jessica Pigott, dated

September 20, 2007, attached hereto as Exhibit 78.)

Mr. Ericson also recounted a similar experience with Ms. Dutton, in which she began to

retaliate against him for his failure to give favorable comments to eBay’s attorneys. Mr. Ericson

stated,

Several months after Mr. Kepas was no longer working at eWatch, I was asked to give an interview with the lawyer representing eBay in the claims brought by Mr. Kepas against eBay. The day before I was scheduled to speak with the lawyer, Ms. Dutton gave me a $500 eBay check and said, “I want you to be open and honest with the lawyer.” Her demeanor and attitude in giving me the check suggested that she wanted me to speak favorably of her and to shade my answers. Additionally, she did not identify the basis for the $500 check although she said it was for a bonus. I believed that Ms. Dutton was attempting to bribe me to testify in her favor since she would normally present any kind of performance bonuses in a team meeting or announce it to the team and it was clear she wanted to keep this low-key.

I spoke with the lawyer. During my conversation with the lawyer, I explained that I would testify that Ms. Dutton had, in fact, been harassing me and I wouldn’t be any help for their side of the case. The next day Ms. Dutton pulled me into a conference room and told me that she “had received feedback from Jason Hughes” and that she would have to counsel me. On a later occasion, she told me, in a [sic] during my 2007 annual review of my performance that she was marking me down on my eBay Behaviors ratings because I “went to HR” about

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her treatment of me. When I confronted her about that statement, she said no one would believe me.

(Ericson Declaration at ¶¶ 12-13; see also Note to File Coaching and Development Notes—Clint

Ericson 1/16/07, attached hereto as Exhibit 79 (stating that Mr. Ericson was concerned about a

$500 bonus he received “without public recognition”.)

60. After receiving the email from Kepas concerning Ms. Dutton’s proposed distribution, Mr. Anderson contacted Ms. Dutton concerning Kepas’ complaint and informed her of the distribution error. Thereafter, eBay redistributed the pool of options allocated to Kepas’ team pursuant to eBay guidelines.

Response: Disputed. Mr. Kepas testified that he was questioned about the stock allocation by

Mr. Wakeham, Ms. Dutton’s supervisor. (See Kepas Depo. at 151-52.) After Mr. Kepas

informed Mr. Wakeham that he believed Ms. Dutton had “assigned out [Mr. Kepas’] stock

options,” Mr. Wakeham said, “I don’t want to talk about that. I want you to go in and fix it.”

(Id. at 152.) Mr. Kepas then corrected the stock allocation while Ms. Dutton was on vacation.

(Id.)

61. On February 8, 2006, Mr. Anderson met with Kepas to communicate the results of his investigation concerning Kepas’ hot line complaints. Mr. Anderson concluded that he had found no evidence that Ms. Jones hated him; that Ms. Jones’ effort to call on Kepas at a meeting where he was not present “was no intentional effort to embarrass [Kepas] and the fact that he was not present to respond to [Ms. Jones] was nothing more than an unfortunate circumstance”; that “there was no evidence to support [Kepas’] contention that [Mr. Hughes] had been asked to monitor [Kepas’] activities”; that Ms. Dutton “had no prior knowledge of the sexual connotation of the term [circle jerk] before the complaint was made”; and that Ms. Dutton’s decision to reassign Messrs. King and Erikson to her supervision was based on legitimate business reasons.

4816-0212-7106/KE007-001 lx

Response: Disputed. When Mr. Anderson spoke to Mr. Kepas regarding the results of eBay’s

“investigation,” Mr. Anderson informed Mr. Kepas that he verified that Ms. Dutton did make the

“circle jerk” comment and that they were going to address that issue. (Kepas Depo. at 156.)

However, despite the fact that eBay did not speak with any of the witnesses to Ms. Dutton’s

comment, it concluded, based on its “investigation,” which consisted solely of speaking with Ms.

Dutton, that Ms. Dutton “had no prior knowledge of the sexual connotation of the term.” (See

Investigation Summary at EBI00008; Heitland Depo. at 114.) However, Mr. Ericson, who was

never interviewed by HR, stated that he believed Ms. Dutton was aware of the sexual meaning

based on her laugh and the expression on her face. (See Ericson Declaration at ¶ 7.)

With respect to Mr. Kepas’ second complaint against Ms. Dutton and Ms. Jones, Mr.

Anderson stated only that “Susan would be addressed on that.” (Id. at 157.) When Mr. Kepas

asked whether Ms. Jones would need to be followed up with as well, Mr. Anderson stated only

that “I will tell you that all parties have received feedback.” (Id.) However, it is undisputed that

no one in the HR department ever contacted Ms. Jones to discuss the substance of Mr. Kepas’

complaints. (See Deposition of Jeffrey Anderson (“Anderson Depo.”) at 117. A copy of

relevant portions of the Anderson Depo. is attached hereto as Exhibit 80; Jones Depo. at 54-55.)

Mr. Anderson concluded his discussion with Mr. Kepas about his investigation into Mr. Kepas’

complaints by telling him that he would be placed on a performance improvement plan for

certain unspecified issues. (See Kepas Depo. at 157-58.) When Mr. Kepas asked what those

issues were, Mr. Anderson stated that he did not know. (Id.)

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62. Also during the meeting on February 8, 2006, Mr. Anderson referenced the concern, highlighted by the Pulse Survey and the skip-level meeting with Ms. Heitland, that Kepas’ performance had declined over the past eight months, and that the performance issues would need to be addressed in a formal performance improvement plan (“PIP”).

Response: Disputed. See Response to Statement of Fact No. 61. The Investigation Summary

does not indicate that Mr. Anderson ever discussed the alleged details of Mr. Kepas’

performance problems and instead states that Mr. Anderson “told [Mr. Kepas] that his specific

performance shortcomings would be addressed with him by Susan upon her return from PTO.”

(Investigation Summary at EBI00007.) Moreover, the evidence shows that the Personal

Improvement Plan had not even been drafted at the time Mr. Anderson met with Mr. Kepas.

(See Email from Susan Dutton to Jeff Anderson, dated March 6, 2006.)

63. At that point, Kepas asked what would occur if he took a leave of absence. Mr. Anderson told Kepas that he could take a leave of absence, and that the PIP would be tabled until he returned.

Response: Disputed. As evidenced by the Investigation Summary, Mr. Kepas had previously

begun an attempt to arrange for a leave of absence due to the overwhelming stress, anxiety, and

effects of tinnitus that he was experiencing. Indeed, the document provides that Mr. Anderson

asked Mr. Kepas during his conversation with Mr. Kepas regarding the investigation into his

complaints whether Mr. Kepas was “continuing his discussions with Broadspire.” (Id.

(emphasis added).) When Mr. Kepas stated that he was “still pursuing a Leave of Absence,” Mr.

Anderson then said that eBay would “still move ahead with the corrective counseling, whether it

was the upcoming week, as scheduled or after [Mr. Kepas] returns from a leave.” (Id. (emphasis

added).)

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64. On February 16, 2006, Kepas took a leave of absence allegedly because his tinnitus made it impossible for him to work. Kepas thereafter applied for FMLA and short term disability benefits (“STD”). The STD benefits were denied on February 23, 2006, and Kepas exhausted his FMLA leave on May 24, 2006.

Response: It is undisputed that Mr. Kepas experienced severe tinnitus and anxiety, which

prevented him from performing his job functions. (See Kepas Depo. at 131, 179.) Mr. Kepas

first spoke with Dr. McDermott about tinnitus-like symptoms, which he described as

noninvasive, in August 2005. (See Intermountain Health Care IDX Clinics Clinical Notes, dated

August 10, 2005, attached hereto as Exhibit 81; Kepas Depo. at 128.) Mr. Kepas’ tinnitus

continued to remain noninvasive until January 2006, after Ms. Dutton and Ms. Jones escalated

their campaign of harassment against Mr. Kepas. (See Kepas Depo. at 128.) Thereafter, Mr.

Kepas testified that he felt the noise “fill[] [his] head . . . . the noise had taken off and became

very, loud, high-pitched screeching like a squealing of brakes sound in [his] head.” (Id.) Mr.

Kepas sought medical help from the eBay mental health hotline because he thought he was

“going crazy.” (Id. at 128, 132.) On February 15, 2006, Mr. Kepas visited Dr. McDermott and

reported that the tinnitus was “getting worse.” (See Intermountain Health Care IDX Clinics

Clinical Notes, dated February 15, 2006, attached hereto as Exhibit 82.) Based on his evaluation

of Mr. Kepas, Dr. McDermott stated that Mr. Kepas was unable to work due to his present

condition, and Mr. Kepas requested that he be placed on administrative leave. (See Attending

Physician Statement—Non-Specific Condition, dated February 24, 2006, attached hereto as

Exhibit 83; Email from Manny Kepas to Mike Bringuel, dated February 24, 2006, attached

hereto as Exhibit 84.) Mr. Kepas returned to Dr. McDermott on March 10, 2006, and Dr.

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McDermott noted that Mr. Kepas was diagnosed with [Post Traumatic Stress Disorder], panic,

anxiety and depression, insomnia ppt by sexual harrisment [sic].” (Intermountain Health Care

IDX Clinics Clinical Notes, dated March 10, 2006, attached hereto as Exhibit 85.) Dr.

McDermott also noted that “patient has been advised by psychology and psychiatry to not return

to the prior work environment that precipitated his symptoms, symptoms occurring at the

workplace due to [Post Traumatic Stress Disorder] inability to focus, shortness of breath, tremor,

slurred speech, fear unable to function due to fear of reprisal at work.” (Id.) Mr. Kepas applied

for short term disability benefits, but his application was ultimately denied. (See Letter from D.

Scott Crook to Laurie Chambers, dated June 2, 2006, attached hereto as Exhibit 86.)

Both Mr. Kepas’ treating audiologist and eBay’s expert witness agree that Mr. Kepas

does have tinnitus and that tinnitus can be exacerbated or intensified by stress. (See

Supplemental Report of Dr. Frank M. Warren, dated February 25, 2008, at 4, 5, attached hereto

as Exhibit 87; State of Utah—Labor Comm’n, Summary of Medical Record, dated April 12,

2006, signed by Dr. Garrett, attached hereto as Exhibit 88 (stating that “[i]ncrease stress puts

pressure on the autonomic nervous system which exacerbates tinnitus which can make the

perception of intensify and severity increase causing the tinnitus to intrude on everday life

functions such as ability to concentrate, etc.”).)

Additionally, both Dr. Garrett and Dr. McDermott determined that Mr. Kepas’ injury was

permanent. (See State of Utah—Labor Comm’n, Summary of Medical Record, dated April 12,

2006, signed by Dr. Garrett; State of Utah—Labor Comm’n, Summary of Medical Record, dated

April 26, 2006, signed by Dr. McDermott, attached hereto as Exhibit 89.) After reviewing Mr.

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Kepas’ medical records, Kristy Farnsworth, Ph.D., determined that Mr. Kepas had an impairment

rating of 24% to 56%. (See Preliminary Rehabilitation Evaluation and Life Care Plan at 13,

attached hereto as Exhibit 90.)

65. eBay allowed Kepas to remain on unpaid leave while he appealed the denial of his STD claim, which appeal was denied. Kepas then requested that he be allowed to remain on unpaid leave during the pendency of his appeal of his workers’ compensation claim, which was denied on March 21, 2006.

Response: It is undisputed that Mr. Kepas was authorized to remain on unpaid administrative

leave pending the resolution of the disability claim. Thereafter, Mr. Kepas’ counsel requested

that Mr. Kepas be allowed to remain on unpaid administrative leave based on the pendency of

the workers’ compensation claim and Mr. Kepas’ discrimination complaints pending before the

Utah Anti-discrimination Labor Division. (See Letter from D. Scott Crook to Laurie Chambers,

dated June 2, 2006.)

66. Thereafter, Kepas refused to return to work in his current position, or in any position under the supervision of Ms. Jones, which would include all customer support positions in North America. Kepas did not identify a position outside of customer support to which he proposed transfer. For these reasons, eBay terminated Kepas’ employment.

Response: Disputed. In a letter written to eBay’s counsel on June 13, 2006, Mr. Kepas’ counsel

explained that, due to Mr. Kepas’ complaints of sexual harassment, he would “likely be reluctant

to transfer to another position at eBay if he were in the chain of command of Wendy Jones.”

(See Letter from D. Scott Crook to Laurie Chambers, dated June 13, 2006, at 1, attached hereto

as Exhibit 91.) However, Mr. Kepas’ counsel stated that Mr. Kepas “has not foreclosed a return

to work if the conditions of the return will not cause his medical conditions to suffer,” and he

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requested that eBay identify what the terms and conditions will be [on any transfer] so that [Mr.

Kepas] can fully assess them.” (Id. at 1-2.) In its response, eBay claimed that “in light of your

client’s stated refusal of any position in Ms. Jones’s command, it appears that consideration is

now moot.” (Letter from Laurie Chambers to D. Scott Crook, dated June 14, 2006, attached

hereto as Exhibit 92.) Moreover, in a letter dated June 26, 2006, Ms. Chambers stated that

eBay’s policies would not allow Mr. Kepas to transfer to any other position because “employees

who are experiencing performance difficulties are not transferred to a new role until the

performance problems are resolved.” (See Letter from Laurie Chambers to D. Scott Crook,

dated June 26, 2006, at 1, attached hereto as Exhibit 93.) Therefore, Ms. Chambers indicated

that Mr. Kepas must return to this current position and address the issues raised in the

performance improvement plan. (Id. at 2.) Thereafter, when Mr. Kepas declined to report to his

current position under the supervision of Ms. Dutton, eBay terminated Mr. Kepas’ employment.

4816-0212-7106/KE007-001 lxvi

ARGUMENT

1. DEFENDANT EBAY’S MOTION FOR SUMMARY JUDGMENT SHOULD BE DENIED

Summary judgment is appropriate only if “there is no genuine issue as to any material

fact and . . . the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c).

When ruling on a motion for summary judgment the court must “draw all reasonable inferences

in favor of the nonmoving party without credibility determinations or weighing the evidence.”

Equal Employment Opportunity Comm’n v. PVNF, LLC, 487 F.3d 790, 797 (10th Cir. 2007).

Summary judgment is inappropriate and should therefore be denied when the non-moving party

“set[s] forth specific facts showing that there is a genuine issue for trial as to those dispositive

matters for which it carries the burden of proof.” Stat-Tech Int’l Corp. v. Delutes, 47 F.3d 1054,

1058 (10th Cir. 1995).

When evaluating a motion for summary judgment on employment discrimination claims,

the Tenth Circuit has held that, “[i]f the plaintiff succeeds in showing a prima facie case and

presents evidence that the defendant’s proffered reason for the employment decision was

pretextual—i.e. unworthy of belief, the plaintiff can withstand a summary judgment motion and

is entitled to go to trial.” Randle v. City of Aurora, 69 F.3d 441, 451 (10th Cir. 1995).

As discussed more fully below, Mr. Kepas has established a prima facie case for each of

his claims of discrimination and he has presented evidence demonstrating that eBay’s proffered

reasons for the challenged actions are pretextual. As such, eBay’s motion for summary judgment

should be denied. Additionally, because eBay’s adopted internal policies and procedures formed

4816-0212-7106/KE007-001 1

a contractual promise between eBay and Mr. Kepas, Mr. Kepas is entitled to recover damages for

eBay’s breach of contract and the covenant of good faith and fair dealing. Finally, Mr. Kepas

has presented evidence to demonstrate that his physical injuries were caused by eBay’s conduct.

Therefore, eBay’s motion for summary judgment should be denied.

a. Mr. Kepas’ Retaliation Claim

i. Prima Facie Case

Mr. Kepas has presented substantial evidence to demonstrate that eBay unlawfully

retaliated against him for reporting the harassment he suffered at the hands of Ms. Jones and Ms.

Dutton. Title VII of the Civil Rights Act expressly provides that “[i]t shall be an unlawful

employment practice for an employer to discriminate against any of his employees . . . because

he has opposed any practice made an unlawful employment practice.” 42 U.S.C. § 2000e-3(a).

To establish a prima facie claim of retaliation under Title VII, a plaintiff “must establish that: (1)

he engaged in protected opposition to discrimination; (2) he suffered an adverse employment

action; and (3) there is a causal connection between the protected activity and the adverse

employment action.” O’Neal v. Ferguson Constr. Co., 237 F.3d 1248, 1252 (10th Cir. 2001). In

this case, eBay has not disputed that Mr. Kepas engaged in protected opposition to

discrimination when he reported Ms. Dutton’s use of a sexually explicit term, the harassment by

Ms. Dutton and Ms. Jones, and Ms. Dutton’s attempts to retaliate. eBay nonetheless argues that

Mr. Kepas has failed to demonstrate the second and third factors, i.e, adverse employment action

and a causal connection. (Mem. in Supp. at 53.)

4816-0212-7106/KE007-001 2

1. Adverse Employment Action

As to the second factor, adverse employment action, eBay argues that Mr. Kepas is

required to demonstrate that he suffered an “adverse employment action,” as that phrase is

interpreted in the anti-discrimination provision of Title VII. However, in so arguing, eBay fails

to recognize that the United States Supreme Court has expressly rejected such a requirement in

its recent opinion in Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53, 126

S.Ct. 2405 (2006). In Burlington, the issue presented to the Court was whether the anti-

retaliation provision “confine[s] actionable retaliation to activity that affects the terms and

conditions of employment.” Id. at 2408. Noting that the anti-retaliation provision seeks to

prevent an “employer from interfering (through retaliation) with an employee’s efforts to secure

or advance enforcement of the Act’s basic guarantees,” id. at 2412, the Court emphatically

rejected any rule that would require a plaintiff to show an employment-related action, stating that

“such a limited construction would fail to fully achieve the anti-retaliation provision’s ‘primary

purpose,’ namely, ‘[m]aintaining unfettered access to statutory remedial mechanisms.’” Id.

(quoting Robinson v. Shell Oil Co., 519 U.S. 337, 346 (1997)). The Court therefore held that a

plaintiff will satisfy the second element of a retaliation claim under Title VII by showing “that a

reasonable employee would have found the challenged action materially adverse, which in this

context means it well might have dissuaded a reasonable worker from making or supporting a

charge of discrimination.” Id. at 2415 (emphasis added) (internal quotations omitted). In so

holding, the Court recognized that “the significance of any given act of retaliation will often

depend upon the particular circumstances. Context matters.” Id.

4816-0212-7106/KE007-001 3

Applying the law as enunciated in Burlington, Mr. Kepas has established the second

element of his retaliation claim by showing that the actions taken against him by eBay are

actions that might have dissuaded a reasonable employee from reporting incidents of

discrimination. Specifically, Mr. Kepas has presented evidence that, shortly after he filed his

Ethics Hotline Complaint on January 20, 2006, Ms. Dutton asked Mr. Hughes to monitor Mr.

Kepas’ activities. (See Affidavit of Clint Ericson at ¶ 11; Kepas Depo. at 156-57; Alertline

Confidential Memorandum, dated January 31, 2006, at 2.) Moreover, the evidence produced by

eBay shows that, consistent with Ms. Dutton’s instruction, Mr. Hughes actually began

monitoring Mr. Kepas and reporting evidence of alleged performance deficiencies to Ms. Dutton

within just two weeks after Mr. Kepas complained. (See Response to Statement of Fact No. 53.)

Clearly, subjecting an employee to heightened scrutiny and covertly monitoring the employee’s

performance to obtain information regarding alleged performance deficiencies are actions that

would dissuade a reasonable employee from reporting incidents of discrimination.

Secondly, Mr. Kepas presented evidence to show that Ms. Dutton attempted to reduce the

number of stock options assigned to Mr. Kepas within weeks of his complaints. Although eBay

claims that Ms. Dutton was unaware of the stock allocation guidelines and did not attempt to

reduce the number of options that should have been allocated to Mr. Kepas, Mr. Kepas testified

that he informed Ms. Dutton of the guidelines and she refused to adjust the allocation, stating

simply that the eWatch department now had more stock options available to allocate to the

employees. (See Response to Statement of Fact Nos. 58-60.) Taking into consideration Ms.

Dutton’s history of retaliating against employees and drawing all factual inferences in favor of

4816-0212-7106/KE007-001 4

Mr. Kepas, Mr. Kepas has established a genuine issue of disputed fact as to whether Mr. Dutton

intended to reduce the number of options allocated to Mr. Kepas based on his complaint made

just two weeks before. Although it is undisputed that Mr. Kepas eventually corrected the stock

allocation, the correction was made after Mr. Kepas raised this issue with Human Resources.

(See Response to Statement of Fact Nos. 58-60.) The United States Supreme Court has

recognized that fear of economic retaliation may dissuade an employee from reporting incidents

of harassment and discrimination. See Burlington, 126 S.Ct. at 2417-18 (“‘[I]t needs no

argument to show that fear of economic retaliation might often operate to induce aggrieved

employees quietly to accept substandard conditions.’” (quoting Mitchell v. Robert DeMario

Jewelry, Inc., 361 U.S. 288, 292 (1960)). Thus, this act also constitutes an adverse action.

Lastly, Mr. Kepas has presented evidence showing that eBay decided to place Mr. Kepas

on a performance improvement plan as a direct result of its “investigation” into Mr. Kepas’

claims of discrimination. In fact, the Investigation Summary issued by eBay shows that, instead

of interviewing witnesses to determine whether Ms. Dutton or Ms. Jones acted inappropriately or

unlawfully, eBay’s Human Resource Department instead conducted a skip level meeting to

determine whether any problems existed with Mr. Kepas’ job performance. (See Investigation

Summary at EBI0004.) Given that “a full-blown Performance Improvement Plan . . . is probably

the most extreme performance management tool at eBay,” (Wakeham Depo. at 74), and would

prohibit an employee from transferring or receiving a promotion, (Heitland Depo. at 20), a

reasonable employee would likely be dissuaded from reporting discrimination or harassment if

threatened with such an action.

4816-0212-7106/KE007-001 5

Although eBay may claim that the above-described actions would not dissuade a

reasonable employee from reporting, the email authored by Mr. Hughes, dated August 2007,

serves as direct evidence that members of the eWatch Department were in fact deterred from

reporting complaints about Ms. Dutton based on eBay’s conduct toward Mr. Kepas. Indeed, Mr.

Hughes states that the employees’ fears of “repercussions” are based “just the unknown and still

uneasy feelings that most people have over the whole Manny situation and recent departure of

Clint Ericson and many on their own experiences with her over the last few years.” (August 9,

2007 Email at 2.) Thus, because the evidence clearly establishes that eBay’s conduct towards

Mr. Kepas after he reported did dissuade employees from filing additional complaints, Mr.

Kepas has satisfied the second factor necessary to establish a prima facie claim of retaliation.

In support of its position that the actions taken do not constitute adverse employment

actions sufficient to support a claim of retaliation, eBay cities to several cases interpreting the

definition of “adverse employment decision.” However, as discussed above, the cases cited by

eBay are not controlling because they were either issued prior to the opinion in Burlington or

deal solely with the anti-discrimination provision of Title VII rather than the anti-retaliation

provision. For example, eBay claims that a performance improvement plan cannot, as a matter

of law, constitute an adverse employment action pursuant to the holding in Haynes v. Level 3

Communications, LLC, 456 F.3d 1215 (10th Cir. 2006). However, Haynes did not apply the

holding of Burlington but instead relied on prior case law which limited the phrase “adverse

employment action” to only employment-related actions. Id. at 1222 (“Only acts that constitute

a significant change in employment status, such as hiring, firing, failing to promote,

4816-0212-7106/KE007-001 6

reassignment with significantly different responsibilities, or a decision causing a significant

change in benefits will rise to the level of an adverse employment action.” (internal quotations

omitted)). This definition was expressly rejected by the Supreme Court. See Burlington, 548

U.S. at 2412.

2. Causal Connection

Turning to the last factor necessary to establish a prima facie case of retaliation, Mr.

Kepas has established a causal connection between Mr. Kepas’ complaints and the adverse

employment action taken by eBay. “A causal connection may be shown by evidence of

circumstances that justify an inference of retaliatory motive, such as protected conduct closely

followed by adverse action.” O’Neal, 237 F.3d at 1253. Only when there is not a “very close

temporal proximity between the protected activity and the retaliatory conduct [must] the plaintiff

. . . offer additional evidence to establish causation.” Id. The Tenth Circuit has held that “a one

and one-half month period between protected activity and adverse action may, by itself, establish

causation.” Id.4

It is undisputed that Mr. Kepas’ first complaint of harassment occurred on January 20,

2006. Just eleven days later, on January 31, 2006, Mr. Kepas reported that Mr. Hughes had

confessed to him that Ms. Dutton had asked him to monitor Mr. Kepas’ activities. And just days

later, on February 6, 2006, Mr. Kepas informed Mr. Anderson that he believed that Ms. Dutton

was attempting to improperly allocate the stock options as a form of retaliation for filing the

4 If an employee is “written up” and progressively disciplined until the process ends “with his termination,” such conduct constitutes adverse employment action and the temporal proximity from such continuous action is satisfied. Marx v. Schnuck Markets, Inc., 76 F.3d 324, 329 (10th Cir. 1996) (discussing adverse employment action in FLSA case).

4816-0212-7106/KE007-001 7

complaint. Finally, eBay informed Mr. Kepas on Feburary 8, 2006, only 19 days after his first

complaint, that he would be placed on a performance improvement plan as a result of its

investigation into his complaints. Because the 19 days that spanned the date of Mr. Kepas’ first

complaint until the date that Mr. Anderson informed Mr. Kepas that he would be placed on a

performance improvement plan falls within the time frame discussed in O’Neal, Mr. Kepas has

established a causal connection between the adverse action and the protected activity. See also

Kim v. Nash Finch Co., 123 F.3d 1046, 1060 (8th Cir. 1997) (“[R]eduction of duties, disciplinary

action, and negative personal reports,” such as “paper[ing]” a personnel file, are “serious

employment consequences that adversely affect[] or undermine[] [an employee’s] position and

“constitute[] adverse employment action.”).

ii. Evidence of Pretext

Although eBay fails to offer any legitimate, nondiscriminatory reason for Ms. Dutton’s

instruction to Mr. Hughes to monitor Mr. Kepas’ activities or for Ms. Dutton’s attempt to

redistribute the stock options, it does attempt to offer a reason for placing Mr. Kepas on a

performance improvement plan. According to the McDonnell Douglas framework, once an

employer offers an alleged nondiscriminatory reason for the adverse action taken against the

plaintiff, “it then becomes the plaintiff’s burden to show that there is a genuine dispute of

material fact as to whether the employer’s proffered reason for the challenged action is pretextual

—i.e. unworthy of belief.” Randle v. City of Aurora, 69 F.3d 441, 451 (10th Cir. 1995). Pretext

may be established by showing “weaknesses, implausibilities, inconsistencies, incoherencies, or

contradictions in the employer’s proffered legitimate reasons for its action that a reasonable

4816-0212-7106/KE007-001 8

factfinder could rationally find them unworthy of credence and hence infer that the employer did

not act for the asserted non-discriminatory reasons.” Rivera v. City & County of Denver, 365

F.3d 912, 925 (10th Cir. 2004) (internal quotations omitted). Evidence showing such

weaknesses, inconsistencies, or contradictions include inconsistent performance evaluations,

inconsistent explanations of performance evaluations, and inconsistent treatment of similarly-

situated employees. See Tomsic v. State Farm Mut. Auto. Ins. Co., 85 F.3d 1472, 1479 (10th Cir.

1996) (declaring that “the district court was in error in holding that plaintiffs had failed to

produce sufficient evidence of pretext to withstand the summary judgment motion” because

plaintiff presented evidence that defendant “offered an inconsistent explanation of his evaluation

of the performance of plaintiff” and defendant “was inconsistent in his evaluations of

plaintiffs”); see also Rivera, 365 F.3d at 921 (declaring that a “plaintiff may show pretext by

‘providing evidence that he was treated differently from other similarly-situated employees who

violated work rules of comparable seriousness’” (quoting Kendrick v. Penske Transp. Servs.,

Inc., 220 F.3d 1220, 1230 (10th Cir. 2000)).

Mr. Kepas has presented evidence sufficient to show that eBay’s proffered legitimate

reasons for its action in informing Mr. Kepas that he would be placed on a performance

improvement plan are inconsistent and contradictory to the evidence presented in this case. For

example, although eBay claims that a performance improvement plan was necessary to address

the sign-in issue, the evidence actually produced in this case shows that Ms. Dutton gave Mr.

Kepas a rating of 101%, which means that Mr. Kepas’ performance exceeded expectations, on a

category that specifically referenced Mr. Kepas’ handling of the sign-in issue. (See Individual

4816-0212-7106/KE007-001 9

Performance Plan & Review Q4 2005 at 2.) Had Ms. Dutton, Mr. Kepas’ immediate supervisor,

believed that Mr. Kepas’ handling of the sign-in issue was deficient in some way, it defies

credibility that she give would Mr. Kepas such a rating. Additionally, Mr. Kepas testified that he

informed Mr. Hughes of the problem during the time when Mr. Hughes was taking over the shift.

(See Response to Statement of Fact No. 41.) Although Mr. Hughes was a “peer” of Mr. Kepas,

eBay did not present any evidence to show that Mr. Hughes was disciplined or placed on a

performance improvement plan for his similar handling of the sign-in issue. Instead, eBay

produced an altered email, dated December 17, 2005, which deleted all reference to Mr. Hughes’

knowledge of the sign-in issue. (See December 17, 2005 Email, EBI00238 (deleting the

sentence “But according to Jason we heard about this on Tuesday (on very small scale—like 1

member)—then . . . .”).

Moreover, although eBay claims that a performance improvement plan was necessary

because Mr. Kepas had consistently performed poorly as a manager of the eWatch Department,

the evidence produced contradicts such a claim. Mr. Kepas consistently received “meets” or

“exceeds” quarterly and yearly performance ratings. (See Response to Statement of Fact No.

14.) Moreover, not once during the time she supervised Mr. Kepas did Ms. Dutton ever

discipline Mr. Kepas or provide a written warning or corrective counseling. (Id.) Although Ms.

Dutton did provide Mr. Kepas with “coaching,” Ms. Dutton admitted that “coaching” is not

discipline and that she provides “coaching” to all employees that report to her. (See Response to

Statement of Fact Nos. 14-15.)

4816-0212-7106/KE007-001 10

Lastly, eBay claims that a performance improvement plan was necessary due to the low

scores Mr. Kepas received on his 2005 Pulse Survey. However, once again, the documentary

evidence produced shows that Ms. Dutton did not believe that the results of the Pulse Survey

warranted placing Mr. Kepas on a performance improvement plan. To the contrary, Ms. Dutton

testified that she met with Mr. Kepas to discuss the scores and talk about an “action plan,” which

she testified did not constitute discipline and was not the same as a performance improvement

plan. (See Response to Statement of Fact No. 38.) It was only after Mr. Kepas complained

about Ms. Dutton’s and Ms. Jones’ harassing behavior that eBay determined to place Mr. Kepas

on a performance improvement plan. (See id.)

The evidence presented by Mr. Kepas which outlines the factual inconsistencies and

contradictions between the records of Mr. Kepas’ performance made contemporaneously with

the events in question and the proffered reasons now provided by eBay is sufficient to establish

that eBay’s proffered reasons are pretextual. See Tomsic, 85 F.3d at 1479. Moreover, eBay’s

attempt to alter a document specifically related to the sign-in issue suggests that eBay’s proffered

reasons are “unworthy of credence.” Accordingly, eBay’s motion for summary judgment should

be denied. See Randle, 69 F.3d at 453 (“It is not the purpose of a motion for summary judgment

to force the judge to conduct a ‘mini trial’ to determine the defendant’s true state of mind. So

long as the plaintiff has presented evidence of pretext (by demonstrating that the defendant’s

proffered non-discriminatory reason is unworthy of belief) upon which a jury could infer

discriminatory motive, the case should go to trial.”).

b. Mr. Kepas’ Sexual Harassment and Discrimination Claims

4816-0212-7106/KE007-001 11

i. Sexual Harassment

Mr. Kepas has established a claim of sexual harassment at the hands of his superiors, Ms.

Dutton and Ms. Jones. As stated in Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998),

the terms “quid pro quo” and “hostile work environment” do not appear in Title VII. Id. at 752.

However, courts have relied on those terms to distinguish between “explicit or constructive

alterations in the terms or conditions of employment.” Id. Recognizing this distinction, the

Supreme Court has held that

[w]hen a plaintiff proves that a tangible employment action resulted from a refusal to submit to a supervisor’s sexual demands, he or she establishes that the employment decision itself constitutes a change in the terms and conditions of employment that is actionable under Title VII. For any sexual harassment preceding the employment decision to be actionable, however, the conduct must be severe or pervasive.

Id. As discussed more fully below, the evidence in this case shows that Mr. Kepas was subjected

to both hostile work environment and quid pro quo sexual harassment.

1. Hostile Work Environment

“If a plaintiff proves that discrimination based on sex has created a hostile or abusive

work environment, [he] has established a violation of Title VII.” E.E.O.C. v. PVNF, 487 F.3d

790, 798 (10th Cir. 2007) (internal quotations omitted). “To constitute actionable sexual

harassment, a plaintiff must show that the workplace is permeated with discriminatory

intimidation, ridicule, and insult, that is sufficiently severe or pervasive to alter the conditions of

the victim’s employment and create an abusive working environment, and that the victim was

targeted because of [his or] her gender.” Id. (internal quotations and citations omitted).

4816-0212-7106/KE007-001 12

“[W]hether an environment is hostile or abusive can be determined only by looking at all the

circumstances . . . [,] includ[ing] the frequency of the discriminatory conduct; its severity;

whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it

unreasonably interferes with an employee’s work performance.” O’Shea v. Yellow Tech. Servs.,

Inc., 185 F.3d 1093, 1098 (10th Cir. 1999) (alterations in original) (internal quotations omitted).

The Tenth Circuit has recognized that the question of the “severity and pervasiveness” of the

hostility is “quintessentially a question of fact,” and, as such, is “particularly unsuited for

summary judgment.” Id.; accord PVNF, 487 F.3d at 798.

Mr. Kepas has presented evidence establishing that he was subjected to severe and

pervasive hostility by Ms. Dutton and Ms. Jones, and that the conduct was directed at him as a

result of his gender. Indeed, as discussed above, the evidence demonstrates that Ms. Jones

demoted Mr. Kepas, based on his gender, and replaced him with Ms. Dutton, a female employee.

Thereafter, for the following eleven months, Mr. Kepas was subjected to Ms. Dutton’s sexual

propositions and sexually charged language and behavior. During Mr. Kepas’ one-on-ones with

his supervisor, Mr. Kepas was forced to hear Ms. Dutton frequently talk about sexual matters,

such as the time she described to Mr. Kepas the weekend she spent with her boyfriend in bed,

which caused her to develop a kidney infection. (See Response to Statement of Fact No. 27.)

Ms. Dutton would also discuss the sexual behavior of her son, at one point informing Mr. Kepas

that her son had been arrested for rape but would not be convicted because one of his friends

witnessed the encounter and told the police that the victim had consented. (See id.) Ms. Dutton

also used sexual innuendo during her one-on-ones with Mr. Kepas, telling him at one meeting,

4816-0212-7106/KE007-001 13

while flipping off the lights, that she “hated doing things with the lights on.” (See id.)

Additionally, Ms. Dutton would frequently wear suggestive clothing and attempt to draw Mr.

Kepas’ attention to her chest by abruptly standing up when he was sitting at her desk or suddenly

bending over while he was talking to her. (See id.) Ms. Dutton called Mr. Kepas over to her

desk on two separate occasions to view items of clothing that she had purchased, including a

bikini and a small, black dress. (See id.) And Ms. Dutton propositioned Mr. Kepas, asking him

to come to her house to “get to know her better.” (See Response to Statement of Fact Nos. 23-

24.) Finally, Ms. Dutton announced on the floor in a loud voice that she had hurt her back

participating in a “circle jerk,” in such a manner that it was clear that Ms. Dutton understood the

sexual meaning of the term “circle jerk.”5 (See Response to Statement of Fact No. 48; Ericson

Affidavit at ¶ 7 (“In early January 2006, Ms. Dutton came onto the eWatch floor and declared in

a voice loud enough for the entire team to hear that she had ‘hurt her back in a circle jerk’ that

morning. When she said it, she laughed with an expression on her face from which I inferred

that she clearly understood what the meaning of the term ‘circle jerk’ was.”).)6

In addition to Ms. Dutton’s sexually charged language and conduct, Ms. Dutton and Ms.

Jones also subjected Mr. Kepas to severe and pervasive hostility by altering his responsibilities

and continually undermining and humiliating him. For example, Mr. Kepas testified that Ms.

5 eBay argues that this comment cannot support a finding of hostile work environment because it was not directed at Mr. Kepas. (Mem. in Supp. at 50.) However, the Tenth Circuit has declared that it has “never held, nor would [it], that to be subjected to a hostile work environment the discriminatory conduct must be both directed at the victim and intended to be received by the victim.” PVNF, 487 F.3d 798.6 eBay claims that this sexual comment by Ms. Dutton was “unintentional.” (Mem. in Supp. at 50.) However, the evidence presented creates an inference that Ms. Dutton was aware of the sexual meaning of the term at the time she announced her participation in the circle jerk on the eWatch floor. Pursuant to the standard of review, all inferences should be viewed in Mr. Kepas’ favor. See PVNF, 487 F.3d at 797.

4816-0212-7106/KE007-001 14

Dutton would issue a directive to Mr. Kepas, such as writing up an employee for failing to come

into work, but then would take an inconsistent position in front of the employee, thereby making

Mr. Kepas look like a poor manager in front of his staff. (See Response to Statement of Fact No.

46.) Moreover, Ms. Dutton began taking away much of Mr. Kepas’ responsibilities by assigning

employees to either Mr. Hughes or herself. (See Response to Statement of Fact Nos. 30-31, 44-

45.) Ms. Dutton also used the “F” word during her one-on-one meetings with Mr. Kepas, in an

attempt to offend and harass Mr. Kepas. (See Response to Statement of Fact No. 27.) And, Ms.

Dutton informed Mr. Kepas on at least three occasions that Ms. Jones disliked or hated him and

that he needed to find a position outside of Ms. Jones’ supervision. (See Response to Statement

of Fact Nos. 30, 31, 49, 51, 52.) On one such occasion, Ms. Dutton actually told Mr. Kepas to

come to her desk so that she could read him an email sent by Ms. Jones, in which Ms. Jones

personally attacked him. However, Ms. Dutton then told Mr. Kepas that she could not read it to

him.7 (See Kepas Depo. at 141-42.) Moreover, after Mr. Kepas reported the discrimination and

harassment, Ms. Dutton instructed Mr. Hughes to monitor Mr. Kepas’ activities and attempted to

allocate stock options that should have been given to Mr. Kepas to other employees.8 (See

Response to Statement of Fact No. 53.)

7 eBay argues that the panel should not consider evidence such as Ms. Dutton’s statements that Ms. Jones hated Mr. Kepas and that Ms. Jones embarrassed Mr. Kepas during the company meeting by pointing out his absence because those statements constitute inadmissible hearsay. However, pursuant to Rule 801(d) of the Utah Rules of Evidence, such statements do not constitute hearsay because they are admissions by party-opponents and/or their agents. See Utah R. Evid. 801(d)(2).

8 eBay may claim that Ms. Dutton’s acts of retaliation should not be considered in evaluating a hostile work environment. However, the Tenth Circuit has held that even if a retaliation claim fails, those incidents are “still relevant to the hostile environment claim.” Chavez v. New Mexico, 397 F.3d 826, 835 (10th Cir. 2005).

4816-0212-7106/KE007-001 15

Mr. Kepas has also presented evidence to establish that Ms. Dutton’s and Ms. Jones’

hostile conduct affected Mr. Kepas’ conditions of employment. Indeed, Mr. Kepas testified that

Ms. Dutton’s overtly sexual behavior was “very” and “extremely offensive” and made him feel

“very uncomfortable.” (Kepas Depo. at 67, 86, 110, 132.) Moreover, as a result of Ms. Dutton’s

and Ms. Jones’ hostile conduct, the eWatch employees noticed a dramatic change in Mr. Kepas’

behavior, stating that “[t]he team feels like Manny doesn’t even have the confidence to make a

simple decision without Susan,” “[t]he team feels that Manny is not being himself—he’s just

trying to act like a leader that he thinks other people want him to be, but he’s not using his

personal style,” and “[t]he team feels that the more his spirit breaks, the worse he becomes.”

(Skip Level Meetings.) Finally, Mr. Kepas testified that, as a result of Ms. Dutton’s and Ms.

Jones’ harassment, he experienced an exacerbation of tinnitus, which prevented him from

working. (See Response to Statement of Fact No. 64.) Thus, Mr. Kepas has established a claim

of hostile work environment sexual harassment.

eBay argues that evidence of Mr. Kepas’ demotion and Ms. Dutton’s proposition should

not be considered when evaluating whether Mr. Kepas was subjected to a hostile working

environment because that conduct occurred outside of the 300 day time limitation. However, the

United States Supreme Court has expressly rejected such an argument. Indeed, in National

Railroad Passenger Corp. v. Morgan, the Court held that, although timely acts cannot convert an

untimely discrete act to an actionable claim of quid pro quo, the Court declared that such

untimely acts may be considered “as background evidence in support of a timely claim.” 536

U.S. 101, 113 (2002). Thus, evidence of Ms. Jones’ decision to demote Mr. Kepas and Ms.

4816-0212-7106/KE007-001 16

Dutton’s invitation to Mr. Kepas to “get to know her better” should be considered when

evaluating Mr. Kepas’ claim.

eBay also argues that conduct that is seemingly gender-neutral should not be considered

when evaluating Mr. Kepas’ claim of hostile work environment. However, the Tenth Circuit has

expressly rejected such a argument and has instead held that “[f]acially neutral abusive conduct

can support a finding of gender animus sufficient to sustain a hostile work environment claim

when that conduct is viewed in the context of other, overtly gender-discriminatory conduct.”

O’Shea v. Yellow Tech. Servs., 185 F.3d 1093, 1097 (10th Cir. 1999). As such, “because

conduct which is not gender-based may form a part of the context or environment in which the

discriminatory conduct is alleged to have occurred, such conduct may be relevant to, and should

be considered in, evaluating a hostile work environment claim.” Id.

To support its argument that Ms. Dutton’s and Ms. Jones’ conduct did not constitute

severe and pervasive harassment, eBay attempts to isolate and evaluate only three events.

However, “[b]y parsing out the various instances of harassment and characterizing them as

gender-neutral, or not pervasive, [eBay] seeks to eschew the proper ‘totality of the

circumstances’ test, which is the ‘touchstone’ of [the] analysis of hostile work environment

claims.” PVNF, 487 F.3d at 799. When reviewing a claim for hostile work environment, it is

imperative to view all of the facts, taken together, because what “‘may appear to be a legitimate

justification for single incident of alleged harassment may look pretextual when viewed in the

context of several other related incidents.’” Id. (quoting Penry v. Fed. Home Loan Bank of

Topeka, 155 F.3d 1257, 1262 (10th Cir. 1998)). As discussed above, Mr. Kepas has presented

4816-0212-7106/KE007-001 17

more than sufficient evidence to show that he was subjected to frequent insult, humiliation, and

hostility by Ms. Dutton and Ms. Jones during the course of a year at eBay and that such conduct

was directed toward him because of his gender.

Relying on the Faragher-Ellerth affirmative defense, eBay claims that it should

nonetheless not be liable for Ms. Dutton’s and Ms. Jones’ hostile conduct toward Mr. Kepas

because Mr. Kepas did not report many of the incidents despite being aware of eBay’s anti-

discrimination policy. The United States Supreme Court discussed the bases upon which an

employer would be held liable for the sexually harassing behavior of a supervisor in Burlington

Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). The Court concluded that an employer “is

subject to vicarious liability to a victimized employee for an actionable hostile environment

created by a supervisor with immediate (or successively higher) authority over the employee.”

Id. at 765 (emphasis added). However, “[w]hen no tangible employment action is taken, a

defending employer may raise an affirmative defense to liability or damages, subject to proof by

a preponderance of the evidence.” Id. The affirmative defense is available only if the employer

shows both that (1) “the employer exercised reasonable care to prevent and correct promptly any

sexually harassing behavior,” and (2) “the plaintiff employee unreasonably failed to take

advantage of any preventive or corrective opportunities provided by the employer or to avoid

harm otherwise.” Id. “‘An investigation that is rigged to reach a pre-determined conclusion or

otherwise conducted in bad faith will not satisfy the employer’s remedial obligation.’” Sukenic

v. Maricopa County, No. Civ. 02-02438 PHX CRP, 2004 WL 3522690, at * 7 (quoting Swenson

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v. Potter, 271 F.3d 1184, 1193 (9th Cir. 2001)) (A copy of the Sukenic opinion is attached

hereto as Exhibit 94.)

In Sukenic, the plaintiff alleged a claim of hostile work environment based on three

separate comments made by her supervisor. Id. at * 2. The first comment occurred in February

1999 when the plaintiff’s supervisor, Lotstein, stated, while in an elevator with the plaintiff,

“[w]hat we could do in here.” Id. The second comment occurred in either July or August 1999,

when Lotstein told plaintiff, “I could just kiss you.” Id. The last comment occurred in January

2000, when Lotstein commented on the plaintiff’s shoes and remarked about a bruise on her leg,

stating that “his wife bruises easily, too.” Id. The plaintiff did not report any of the comments at

the time they were made but instead approached her immediate supervisor in February 2000 and

asked that her office be moved away from Lotstein’s office. Id. When asked why she requested

the move, the plaintiff relayed the three incidents that occurred over the past year. The defendant

argued that it should not be liable, pursuant to the Faragher-Ellerth affirmative defense, because

it conducted an investigation after the plaintiff eventually reported the incidents. The court

disagreed, holding that summary judgment was not appropriate because a reasonable jury could

“question whether [the defendant’s] investigation of [plaintiff’s] complaint of Mr. Lotstein was

done in good faith.” Id. at * 8. The court continued, stating “[i]t is not enough to merely have a

formal sexual harassment policy for the agency. The policy must be effective, provide

employees real protection, and encourage victims of harassment to come forward.” Id. (internal

quotations omitted).

4816-0212-7106/KE007-001 19

The evidence presented in this case shows that the investigation conducted by eBay was

not performed in good faith but was instead “rigged” to reach a certain result. Indeed, although

eBay made it appear that it investigated Mr. Kepas’ complaint of sexual harassment against Ms.

Dutton by indicating in the Investigation Summary that it “interview[ed]” the eWatch department

employees, it is undisputed that eBay never questioned any of the employees regarding Ms.

Dutton’s sexually explicit comment.9 Rather, eBay simply chose to accept Ms. Dutton’s

explanation without further investigating the circumstances or context in which the comment was

made. (See Summary Investigation at EBI0008 (“I believe that Susan had no prior knowledge of

the sexual connotation of the term before the complaint was made, and consequently was

unaware that it could be offensive at work.”).) Had eBay interviewed the witnesses to the

comment, it would have discovered that employees, such as Mr. Ericson, believed Ms. Dutton

did in fact know the sexual meaning of the term based both on the expression on her face and her

laugh at the time she made the statement. (See Ericson Affidavit at ¶ 7.)

Moreover, although eBay claimed that it conducted an investigation into Mr. Kepas

second complaint regarding a hostile work environment by Ms. Jones and Ms. Dutton, the

evidence shows that the investigation was again limited solely to speaking with Ms. Dutton. No

9 As further evidence that eBay’s investigation was not conducted in good faith, Mr. Anderson testified in the Worker’s Compensation Hearing that eBay “didn’t feel [the circle jerk comment] was given in a sexual manner or intended to be harassment, based on, again, interviews of Susan and the employees that heard it.” (Labor Comm’n Hearing, December 18, 2006, at 145-56.) Mr. Anderson testified that Ms. Heitland conducted the interviews with the employees about the comment, (Anderson Depo. at 114), but Ms. Heitland testified that she only conducted a skip level meeting about Mr. Kepas’ performance and did not interview the eWatch employees about the circle jerk comment. (See Heitland Depo. at 114.) Although a preliminary draft of the Investigation Summary showed that Ms. Heitland’s contact with the eWatch employees consisted only of conducting a skip-level meeting, someone in the HR department, presumably Mr. Anderson, made alterations to the document so that it would read “Interview of eWatch.”

4816-0212-7106/KE007-001 20

Human Resource employee or any other employee ever spoke with Ms. Jones to determine the

validity of the complaint. (Anderson Depo. at 117; Jones Depo. at 54-55.) Incredibly, without

so much as even speaking with Ms. Jones, eBay concluded in its Summary Investigation that

“Wendy was not aware of Manny’s early departure from the meeting and her efforts to call on

him for comment in a meeting of approximately 100 people was nothing more than an effort to

obtain his point of view in the context of the discussion at hand.” (Investigation Summary at

EBI00011.)

Even when it did allegedly interview witnesses by engaging a so-called independent

investigator, Ms. Stone conducted interviews with employees over the phone while they were at

their cubicles in hearing distance of Ms. Dutton. (See Aubrey Depo. at 17-18, 64.) Of course,

Ms. Stone misstated this fact in her deposition, indicating that the interviews were conducted

while the employees were in a conference room. (See Stone Depo. at 44.) Additionally, Ms.

Stone never spoke to Mr. Kepas about the allegations due to eBay’s “strong preference.” (See

id. at 36.) Ms. Stone also never reviewed, or even asked to review, Ms. Dutton’s file and was

therefore not aware that Ms. Dutton had previously attempted to retaliate against an employee.

(See id. at 36-37, 49, 50-51.) Moreover, Ms. Stone never reviewed Mr. Kepas’ disciplinary file.

(See id. at 47.) Finally, because there is evidence that Ms. Dutton attempted to bribe witnesses,

the witness statements cannot be relied upon. (See Ericson Declaration at ¶ 12.)

It should also be noted that the Human Resource Manager responsible for investigating

Mr. Kepas’ first complaint was Janna Heitland, an individual who “split[s] an exercise class with

Susan Dutton.” (Heitland Depo. at 141-42.) Ms. Pigott, an eWatch employee, expressed

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concerns about Ms. Dutton’s and Ms. Heitland’s personal friendship and testified that she did not

feel comfortable complaining about Ms. Dutton to Ms. Heitland as a result of that relationship.

(See Pigott Depo. at 41-42.) Given Ms. Dutton’s relationship with Ms. Heitland and the fact that

immediately after Mr. Kepas lodged his complaints against Ms. Dutton, Ms. Dutton instructed

Mr. Hughes to monitor his activities and attempted to reallocate Mr. Kepas’ stock allocations,

one can reasonably infer that Ms. Heitland told Ms. Dutton about Mr. Kepas’ complaint and then

failed to fully investigate. Additionally, given the remaining above-described deficiencies with

eBay’s investigation, it cannot be argued that eBay acted in good faith as it relates to Mr. Kepas’

claims. As such, the Faragher-Ellerth affirmative defense is not available to eBay.

eBay claims that Mr. Kepas should be precluded from recovering any damages based on

the fact that he failed to report most of Ms. Dutton’s and Ms. Jones’ inappropriate conduct at the

time it occurred.10 Mr. Kepas testified that he was initially hesitant to report his concerns due to

fears that he would be retaliated against based on the prior treatment he received from eBay after

reporting the Patterson call and the close relationship Ms. Dutton and Ms. Jones had. (See

Response to Statement of Fact No. 27, 53.) More importantly, however, it is undisputed that, in

January 2006, Mr. Kepas reported to eBay that he believed he was being sexually harassed by

10 The cases relied on by eBay in support of this position are inapposite to the present case because the holdings are based on the fact that the plaintiffs did not subjectively feel harassed. See Flowers v. Federal Express Corp., 2008 WL 185699, at * 3 (D. Colo. 2008) (“Plaintiff testified that this incident ‘wasn’t a huge ordeal.’ The evidence suggests that Plaintiff did not consider herself subject to unwelcome sexual harassment.”); Stuart v. General Motors Corp., 217 F.3d 621, 632 (8th Cir. 2000) (“Stuart’s claim must fail because Stuart has provided no evidence she considered herself subject to unwelcome sexual harassment at any time prior to July 14, 1996, when she first complained to Murphree.”). As testified to by Mr. Kepas, he did believe he was being subjected to sexual harassment but was afraid to report the conduct due to the relationship between Ms. Dutton and Ms. Jones and his prior experience with HR when he reported the phone conversation he had with Ms. Patterson. (See Response to Statement of Fact No. 27.)

4816-0212-7106/KE007-001 22

Ms. Dutton and that he believed he was being subjected to a hostile work environment.

Furthermore, it is undisputed that Mr. Kepas informed the Human Resources Director, Mike

Bringuel, that he did not tell Mr. Anderson about all of the events that occurred and that he

would like Mr. Bringuel to conduct an independent investigation. However, Mr. Bringuel failed

to move forward with such an investigation. (See Response to Statement of Fact No. 27.) And

although eBay subsequently hired Ms. Stone, an independent contractor, to perform an

investigation, Ms. Stone refused to speak to Mr. Kepas. (See id.) This evidence clearly shows

that eBay did not conduct a good faith investigation into Mr. Kepas’ claims and therefore cannot

rely on the affirmative defense to avoid liability.

In addition to being vicarious liable for a supervisor’s harassing behavior, an employer

may also be liable “when the tort is attributable to the employer’s own negligence.” Ellerth, 524

U.S. at 759. “An employer is negligent with respect to sexual harassment if it knew or should

have known about the conduct and failed to stop it.” Id.

The evidence presented establishes that eBay was well aware of Ms. Dutton’s sexual

behavior. Indeed, Mr. Scheuerman stated that he was present during an eBay Christmas party

when Ms. Dutton performed a lap dance on an unidentified man, in full view of directors and

vice-presidents. (See Scheuerman Affidavit at ¶ 3.) This event was subsequently described to

other directors at eBay. (See Whalen Depo. at 12-13.) Moreover, Ms. Whalen testified that she

complained to Ms. Dutton’s supervisor, Tim Paine, about Ms. Dutton’s discussions of her

different plastic surgery procedures. (See id. at 45, 77-78.) Finally, Ms. Jones, the Vice-

President who decided to promote Ms. Dutton to Mr. Kepas’ position, testified that she was

4816-0212-7106/KE007-001 23

present when Ms. Dutton exposed her breasts to several eBay employees at a restaurant, which

included at least one Director and one Vice-President. (See Jones Depo. at 50.) This

information was more than sufficient to provide eBay with notice that Ms. Dutton may subject

employees to sexual harassment.

Moreover, eBay was also aware that Ms. Dutton may retaliate against employees based

on her previous attempt to identify an employee that had given her negative feedback in a Pulse

Survey. Yet, when Mr. Kepas reported that Ms. Dutton was retaliating against him by

attempting to allocate his stock options to others and by instructing Mr. Hughes to monitor Mr.

Kepas’ activities, eBay again failed to conduct a thorough investigation into the claims.

2. Quid Pro Quo

In addition to Mr. Kepas’ hostile work environment claim, Mr. Kepas has also

established a claim for quid pro quo sexual harassment. As stated in Ellerth, “[w]hen a plaintiff

proves that a tangible employment action resulted from a refusal to submit to a supervisor’s

sexual demands, he or she establishes that the employment decision itself constitutes a change in

the terms and conditions of employment that is actionable under Title VII.” 524 U.S. at 753-54.

Tangible employment action is defined as a “significant change in employment status, such as

hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a

decision causing a significant change in benefits.” Id. at 761.

Mr. Kepas testified that Ms. Dutton propositioned him during the last week of March

2006, suggesting several times that he come to her house so that he could “get to know her

better.” (Kepas Depo. at 84-85.) Mr. Kepas repeatedly refused Ms. Dutton’s advances. (See id.)

4816-0212-7106/KE007-001 24

Less than two months after Mr. Kepas’ refusal, the eBay Human Resource Department

determined that Mr. Kepas should be promoted back to eWatch Manager due to the fact that he

continued to perform the same responsibilities he had while a manager. (See Heitland Depo. at

93-95.) Although Mr. Kepas was assigned the title “eWatch Manager,” Ms. Dutton refused a

corresponding increase in his pay grade, which meant that his “base salary will remain the same”

and that his “target bonus under the eBay Incentive Plan (eIP) will remain 6%.” (See Letter from

Susan Dutton to Emmanuel Kepas, dated June 27, 2005, attached hereto as Exhibit 95.) Ms.

Dutton’s refusal to increase Mr. Kepas’ pay grade to the level it was prior to his demotion caused

Mr. Kepas to receive fewer bonuses than he should have received as an eWatch Manager. This

discrete act constitutes adverse employment action. Because Ms. Dutton’s refusal to increase

Mr. Kepas’ pay grade commensurate with his promotion back to eWatch Manager occurred

within the 300 day statutory time limitation, Mr. Kepas has established a prima facie case of quid

pro quo sexual harassment. See Morgan, 536 U.S. at 113 (noting that plaintiff may file a charge

“to cover discrete acts that ‘occurred’ within the appropriate time period).

eBay again attempts to invoke the Faragher-Ellerth affirmative defense to avoid liability

for Ms. Dutton’s actions, but eBay fails to recognize that the affirmative defense is not available

when the supervisor has taken adverse emption action. See Ellerth, 524 U.S. at 765 (“No

affirmative defense is available, however, when the supervisor’s harassment culminates in a

tangible employment action, such as discharge, demotion, or undesirable reassignment.”).

ii. Discrimination on Basis of Sex

4816-0212-7106/KE007-001 25

eBay is also liable to Mr. Kepas for unlawfully discriminating against him on the basis of

his sex. Title VII of the Civil Rights Act of 1964 provides that “[i]t shall be an unlawful

employment practice for an employer . . . to discriminate against any individual . . . because of

such individual’s . . . sex.” 42 U.S.C. § 2000e-2(a)(1). Generally, to establish a prima facie

claim of sex discrimination, a plaintiff must show “(1) she is a member of a protected class; (2)

she suffered an adverse employment action; (3) she was qualified for the position at issue; and

(4) she was treated less favorably than others not in the protected class.” Piercy v. Maketa, 480

F.3d 1192, 1203 (10th Cir. 2007). However, in cases of reverse discrimination, a plaintiff is

entitled to the McDonnell Douglas presumption if he can establish “background circumstances

that support an inference that the defendant is one of those unusual employers who discriminates

against the majority.” Notari v. Denver Water Dept., 971 F.2d 585, 589 (10th Cir. 1992).

Alternatively, a reverse discrimination plaintiff can establish a prima facie case either by

presenting “direct evidence of discrimination, or indirect evidence sufficient to support a

reasonable probability that but for the plaintiff’s status the challenged employment decision

would have favored the plaintiff.” Id. at 590.

The evidence presented in this case shows that Mr. Kepas was demoted in February 2005

and replaced by Ms. Dutton. This decision was made by Ms. Jones, Ms. Patterson, and Mr.

Weber in approximately November of 2005. (See Response to Statement of Fact Nos. 9-12.) At

the time of this decision, Mr. Kepas had no documented performance problems, and his

supervisor, Ms. Patterson, testified that she did not have any problems with Mr. Kepas’

performance and that she supported the decision to demote Mr. Kepas only in the sense that she

4816-0212-7106/KE007-001 26

supported her manager. (See id.) In contrast, both the Senior Director and the Director of

Human Resources opposed the decision to promote Ms. Dutton due to her documented

performance problems. (See Response to Statement of Fact Nos. 9, 12.) Indeed, in addition to

the fact that Ms. Dutton was no longer qualified to maintain her position as manager of the TnS

Department, the evidence produced in this case shows that the Human Resources Department

was aware of and concerned about Ms. Dutton’s attempt to identify an employee who had given

her negative feedback in a Pulse Survey just months prior to the decision to promote her to the

eWatch Manager. (See id.) However, despite these concerns, Ms. Jones pushed forward with

the decision to demote Mr. Kepas and replace him with Ms. Dutton. At the time of his demotion,

Mr. Kepas pay grade was decreased from E26SL to T25SL, which meant that Mr. Kepas base

salary remained the same but his bonus level decreased. (See Kepas Depo. at 60-61.)

Although eBay promoted Mr. Kepas back to the eWatch Manager within four months of

his demotion, it refused to increase Mr. Kepas pay grade. Instead, despite his promotion and

increased responsibilities, eBay informed Mr. Kepas in a letter issued to him on June 27, 2005,

that his “base salary will remain the same” and that his “target bonus under the eBay Incentive

Plan (eIP) will remain 6%.” (See Letter from Susan Dutton to Emmanuel Kepas, dated June 27,

2005.)

In January 2006, Mr. Wakeham consulted with Ms. Jones about Mr. Kepas’ future

employment with eBay. According to documents produced by eBay, Ms. Jones instructed Mr.

Wakeham to “do the right thing,” after which Mr. Wakeham encouraged Ms. Dutton to help Mr.

Kepas find an “individual contributor role.” (Investigation Summary at EBI00010.) At

4816-0212-7106/KE007-001 27

approximately the same time, Ms. Dutton began informing Mr. Kepas that Ms. Jones disliked

and hated him and told him to apply for a position that was outside Ms. Jones’ supervision. (See

Response to Statement of Fact No. 51.) Ms. Jones then called on Ms. Kepas in a company

meeting when Mr. Kepas was absent in an attempt to embarrass Mr. Kepas in front of his peers.

(See id.) After Mr. Kepas reported his complaints of harassment and discrimination, he

requested that he be placed on administrative leave and then applied for short term disability

benefits. (See Response to Statement of Fact No. 64.) Mr. Kepas’ request for benefits was

denied and when he expressed reluctance in being required to work in a position that was under

the supervision of Ms. Jones, he was terminated. (See Response to Statement of Fact Nos. 65-

66.)

As testified to by Joyce Whalen, a former Director at eBay, Ms. Jones was known for

providing favorable treatment to certain employees. Moreover, the employees preferred by Ms.

Jones and given favorable treatment consisted solely of women. (See Whalen Depo. at 23 (“Q.

Were there any male employees that Wendy Jones favored? A. Nothing that I’m aware of. Q.

They were all females? A. Yes.”).) One such “preferred” employee, Ms. Dombrowski, recently

filed a sexual harassment complaint against Ms. Jones, claiming that Ms. Jones made improper

sexual advances towards her, such as asking her to share Ms. Jones’ bed while the women were

in Las Vegas to celebrate Ms. Jones’ birthday. (See Memo to Mike Bringuel from Carol

Dombrowski, dated October 31, 2007 (EBI01179).) Additionally, the evidence shows that Ms.

Dutton exposed her breasts to Ms. Jones and other management officials just weeks before her

transfer. (See Jones Depo. at 50.) The reasonable inference from the evidence of Ms. Jones’

4816-0212-7106/KE007-001 28

behavior toward Carol Dombrowski coupled with the sexual behavior of Ms. Dutton toward Ms.

Jones is that Ms. Jones was placing women in positions where she could have easier access to

them. Given the record evidence showing Ms. Jones’ bias in favor of women and her

inexplicable decision to promote Ms. Dutton to the eWatch Manager and demote Mr. Kepas, Mr.

Kepas has presented evidence sufficient to establish a reasonable probability that but for his

status as a male, Mr. Kepas would not have been terminated.

Although eBay’s act in demoting Mr. Kepas falls outside the 300 day limitation period

for Title VII claim, the United States Supreme Court has recognized that “[t]he existence of past

acts and the employee’s prior knowledge of their occurrence . . . does not bar employees from

filing charges about related discrete acts so long as the acts are independently discriminatory and

charges addressing those acts are themselves timely filed.” National Railroad Passenger Corp.

v. Morgan, 536 U.S. 101, 113 (2002). Moreover, the statute does not bar “an employee from

using the prior acts as background evidence in support of a timely claim.” Id. As discussed

above, Ms. Jones discriminated against men in favor of a certain group of women employees that

she “preferred.” It was due to this discrimination that Mr. Kepas was terminated by eBay.

eBay claims that Mr. Kepas’ termination was not related to the alleged discrimination.

However, the evidence produced shows that Ms. Jones’ decisions regarding Mr. Kepas’

employment at eBay were motivated not by legitimate business decisions but were instead

motivated by Mr. Kepas’ gender. Indeed, the evidence shows that Ms. Jones insisted on

promoting Ms. Dutton to Mr. Kepas’ position and demoting Mr. Kepas in spite of direct

evidence that Ms. Dutton had attempted to identify the employee who had given her negative

4816-0212-7106/KE007-001 29

feedback. Moreover, Ms. Jones thereafter spoke negatively about Mr. Kepas and instructed Mr.

Wakeham to “do the right thing,” which Mr. Wakeham interpreted as demoting Mr. Kepas to “an

individual contributor role.” Ultimately, when Mr. Kepas expressed reluctance to work under

the supervision of Ms. Jones, eBay terminated his employment. These facts, when viewed in

light of the background evidence, support a finding that eBay’s proffered reasons for terminating

Mr. Kepas’ employment are pretextual.

c. Mr. Kepas’ Age Discrimination Claim

Mr. Kepas has also presented sufficient evidence to establish a genuine issue for trial as

to his unlawful age discrimination claim. The Age Discrimination in Employment Act

(“ADEA”) provides that “[i]t shall be unlawful for an employer to . . . discriminate against any

individual with respect to his compensation, terms, conditions, or privileges of employment,

because of such individual’s age.” 29 U.S.C. § 623(a)(1). “To prevail on an ADEA claim a

plaintiff must establish that age was a determining factor in the employer’s challenged decision.”

Greene v. Safeway Stores, Inc., 98 F.3d 554, 557 (10th Cir. 1996) (internal quotations omitted).

“The plaintiff need not prove that age was the sole reason for the employer’s acts, but must show

that age made the difference in the employer’s decision.” Id. (internal quotations omitted). A

party may establish a claim for age discrimination by “rely[ing] on the proof scheme for a prima

facie case established in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).” Id.

Under McDonnell Douglas, to set forth a prima facie case of age discrimination, a plaintiff must ordinarily prove that (1) the affected employee was within the protected age group; (2) [he] was doing satisfactory work; (3) [he] was discharged despite the adequacy of his work; and (4) a younger person replaced [him.]

4816-0212-7106/KE007-001 30

Id. at 558 (alterations in original) (internal quotations omitted).

Mr. Kepas has presented evidence sufficient to establish a prima facie claim of unlawful

age discrimination. Specifically, Mr. Kepas was over the age of 40 when he was terminated by

eBay, he was performing satisfactory, as evidenced by his quarterly reviews which stated that he

“met” or “exceeded” eBay’s expectations, he was terminated despite the adequacy of his work,

and he was replaced by a younger worker, Mr. Hughes.

eBay may argue that its decision to terminate Mr. Kepas’ employment was a legitimate,

nondiscriminatory reason. However, as discussed supra, the evidence shows that Ms. Jones

expressed on more than one occasion her bias against older individuals. Indeed, Ms. Whalen

testified that Ms. Jones made comments on at least two occasions that implied that “once you got

to a certain age, you were not going to be very valuable.” (Whalen Depo. at 25.) As evidenced

by the Investigation Summary, Ms. Jones was consulted regarding Ms. Kepas’ future

employment with eBay and Ms. Jones instructed Mr. Wakeham to “do the right thing,” which he

interpreted as demoting Mr. Kepas to an “individual contributor role.” When Mr. Kepas

requested administrative leave and expressed reluctance to return to work at eBay if he was

required to work under the supervision of Ms. Jones, he was terminated. This evidence supports

an inference that eBay’s decision to terminate Mr. Kepas was not based on a legitimate,

nondiscriminatory reason but was instead affected, at least in part, by Ms. Jones’ bias towards

workers over age 40. Therefore, summary judgment is improper on this claim.

d. Mr. Kepas’ Breach of Contract Claims

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eBay argues that it is entitled to summary judgment on Mr. Kepas’ breach of contract and

breach of the covenant of good faith and fair dealing because (1) eBay’s Anti-harassment policy

does not create a contractual relationship; and (2) Mr. Kepas’ claims are preempted by the

federal discrimination claims. However, each of these arguments is fatally flawed.

i. Contractual Relationship

To support its claim that the disclaimer in the employee handbook precludes Mr. Kepas’

contract claims as a matter of law, eBay relies Hamilton v. Parkdale Care Center, Inc., 904 P.2d

1110 (Utah Ct. App. 1995). However, that case concerns only whether a disclaimer in a

handbook “negates an employee’s contention that the employment relationship is other than at

will.” Id. at 1112. Mr. Kepas does not, and has not, argued that the employee handbook altered

his status as an at-will employee. Rather, Mr. Kepas’ contract claims are based on the specific

provisions of the handbook which state that eBay will not retaliate against a reporting employee

and that it will discipline any offenders.

“An at-will employment relationship does not mean that there is no contract between

employer and employee. The at-will rule merely creates a presumption that any employment

contract which has no specified term or duration is an at-will relationship.” Cook v. Zions First

Nat’l Bank, 919 P.2d 56, 60 (Utah Ct. App. 1999). Thus, in situations where a party is not

alleging that an employment contract was not at-will, the at-will doctrine “is not dispositive, or

even relevant.” Id. In such situations where the employment at-will doctrine is not at issue,

“despite employee handbook language disavowing the existence of a contract,” Utah courts have

found express contractual terms from the statements in the handbooks, from the conduct of the

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parties, and from the employers’ lack of effort to change the term at issue. See id. at 59 (holding

that sick leave policy described in handbook created “express contract as to sick leave” “despite

employee handbook language disavowing the existence of a contract.”).

In this case, eBay’s anti-harassment policy states, “[a]ny employee or contractor who

reports an incident in good faith should not fear any reprisal. Retaliation or reprisal is expressly

forbidden and will be grounds for disciplinary action up to and including termination.” (eBay’s

Fair Employment Policies at 2.) Additionally, the policy provides as follows:

After a report is received, an internal investigation will be promptly undertaken. The investigation will be conducted confidentially to the extent practical under the circumstances. The Company will take prompt remedial action for conduct that violates this policy. All employees and contractors have a duty to cooperate fully and truthfully in any investigation under this policy. Any supervisor, agent, or other employee who has been found after investigation by eBay to have engaged in conduct in violation of this policy, retaliated against any employee or failed to cooperate in an investigation in violation of this policy will be subject to disciplinary action. Discipline may range from a warning up to and including termination.

(Id.)

These provisions created express contractual promises that eBay would not retaliate

against employees that reported complaints and that any offenders will be subject to disciplinary

action. As discussed above, eBay breached both promises by retaliating against Mr. Kepas and

failing to discipline Ms. Dutton and Ms. Jones.

eBay claims that its policy provisions are not “definite enough” to create a contractual

obligation, relying on Lofton v. Wyeth Laboratories, Inc., 643 F. Supp. 170 (E.D. Pa. 1986).

However, as illustrated by the court’s holding in that case, Lofton does not support eBay’s

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position. Indeed, the court in that case stated that, “[i]n the circumstances presented in this

case, . . . the broad statement of equal employment opportunity contained in the employment

manual does not create contractual obligations altering plaintiff’s status as an employee-at-will.”

Id. at 174.11 However, the court declared that “[t]his is not to suggest that the statutory remedies

preempt any contract claims or that an employer would not be subject to contract remedies for

breach of an explicit contract provision prohibiting racially motivated discharge.” Id. (emphasis

added.)

The policy provisions at issue in this case more closely resemble the policy at issue in

Talanda v. KFC Nat’l Mgmt. Co., 863 F. Supp. 664 (N.D. Ill. 1994), in which the court held that

any policy which imposes responsibilities on the employer which are in addition to the

requirements of federal or state law is “supported by consideration” and thus can create an 11 The two provisions at issue in Lofton stated as follows:

Wyeth has a firm commitment to equal employment opportunity and a long-standing policy against discrimination. In practice, the Company seeks to recruit, hire, train and promote people in all job classifications without regard to race, color, religion, sex, age, national origin, handicap or status as a Vietnam era veteran. It is also the Company’s policy to fill job vacancies by promoting from within whenever possible.

All matters relating to employees, such as compensation, benefits, transfers, layoffs, return from layoffs, Company sponsored training and social and recreational activities, are administered within the framework of this policy and through Wyeth’s written Affirmative Action Plans. Periodic reviews of our personnel practices help us to meet the objectives of this policy.

Fair treatment of employees is a Wyeth tradition to which the Company attaches great importance. All managers and supervisors are instructed to maintain a working environment which respects the dignity of every employee and which assures equal and fair treatment for all.

As a Wyeth employee, we encourage you to discuss with your supervisor freely and privately any problem or complaint you may have. You also have the opportunity to seek review of a decision with each higher level of management, up to and including the Company President. Before such a meeting can take place, however, you must submit in writing to the appropriate Company officer all pertinent facts to allow a thorough review of the matter before your meeting.

Id. at 172 n.4-n.5.

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implied-in-fact contract. Id. at 668. As in Talanda, eBay’s policy provides that any employee

determined to have violated the anti-harassment policy will be subject to discipline—a provision

that is not required by federal or state law. In other words, eBay was not just using its policy to

recite the law, it was making a contractual promise and firm policy that was independent of the

statutory obligations placed upon it. Thus, eBay may now be held liable for breach of that

contractual promise.

eBay claims that it is nonetheless entitled to summary judgment because Mr. Kepas did

not to comply with the terms of the contractual provision by failing to report the discriminatory

and harassing conduct. However, as discussed above, the evidence shows that Mr. Kepas

reported at least four separate complaints of discrimination, harassment, and retaliation.

Moreover, Mr. Kepas attempted to report additional incidents of discrimination and harassment

to Mr. Bringuel, but Mr. Bringuel refused to investigate further. Thus, the evidence shows that

Mr. Kepas did not breach the terms of this contractual provision.

ii. Claims Are Not Duplicative

The Utah Supreme Court has expressly recognized that federal and state law prohibiting

employment discrimination does not, as a matter of law, preempt common law contract claims.

Rather, “preemption depends on the nature of the injury for which [the] plaintiff makes [the]

claim, not the nature of the defendant’s act which the plaintiff alleges to have been responsible

for that injury.” Retherford v. AT&T Communications, Inc., 844 P.2d 949, 965 (Utah 1992). In

Retherford, the Utah Supreme Court held that a plaintiff’s cause of action for wrongful

termination in violation of public policy arising out of a termination in retaliation for making a

4816-0212-7106/KE007-001 35

claim of employment discrimination was preempted by the Utah Anti-Discriminatory Act

(“UADA”). Id. at 966. The Court also considered whether four other claims, including a claim

of breach of an implied contractual term prohibiting retaliation for making a discrimination

claim, were also preempted by the UADA. See id. at 968 (“Retherford alleges that . . . AT&T’s

failure to prevent retaliation for her complaints of sexual harassment breached a contract implied

from AT&T’s code of conduct.”). The Utah Supreme Court ruled that such a claim was not

preempted by the UADA:

While it is true that all four claims arise out of defendant’s retaliatory conduct, preemption depends on the nature of the injury, not on the nature of the conduct allegedly responsible for that harm. The injury Retherford alleges—the broken promise, the mental anguish, the wrongful interference with her contract, and the unchecked misconduct of her fellow employees—are distinct from the injury of retaliation. Because Retherford would be able to maintain those claims without alleging retaliatory harassment, we hold that . . . the UADA does not preempt Retherford’s claims for breach of implied contract, intentional infliction of emotional distress, tortious interfence with contract, and negligent employment.

Id. at 967.

Mr. Kepas’ case is identical. Although Mr. Kepas is alleging, under his breach of

contract and covenant of good faith and fair dealing claims, that the nature of the conduct that

was responsible for the injury was that eBay had retaliated and discriminated against him and

failed to discipline Ms. Dutton and Ms. Jones, the nature of Mr. Kepas’ injury is that eBay broke

its promise to him. Under Retherford, therefore, his claims are not preempted by the UADA.

e. Causation

Despite eBay’s attempts to massage the record, the evidence shows that Mr. Kepas has

never offered an inconsistent or contradictory explanation regarding his tinnitus. Indeed,

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throughout the Worker’s Compensation Proceeding and this proceeding, Mr. Kepas has

consistently testified that the underlying tinnitus was created by environmental stress. (See

Kepas Depo. at 177-78; Labor Comm’n Hearing, October 19, 2006, at 75.) Mr. Kepas has also

consistently testified in both proceedings that the tinnitus he experienced in August 2005 was

“noninvasive.” (Kepas Depo. at 178; Labor Comm’n Hearing at 36.) It was only in late January

2006, after Mr. Kepas began to suffer increased discrimination and harassment by Ms. Dutton

and Ms. Jones, that he experienced an exacerbation of the tinnitus to such an extent that the noise

in his head was “all-encompassing.” (Kepas Depo. at 179.) This is evidenced by an email sent

by Mr. Kepas to Mr. Bringuel on February 24, 2006, in which Mr. Kepas states:

On February 16th I began a leave of absence from eBay for several reasons. These include, among others: (1) the physical and emotional effects caused by the behaviors of Carolyn Patterson, Wendy Jones and Susan Dutton, which I detailed in eBay ethic hotline complaints on January 20th & 23rd; (2) Tinnitus that has significantly increased in severity since the offending behavior of these individuals escalated.

(February 24, 2006 Email (emphasis added).) The Administrative Law Judge ultimately

determined that Mr. Kepas’ injury was not caused by the environmental stress of the workplace

but was instead caused by the alleged discrimination and therefore denied Mr. Kepas’ worker’s

compensation claim. (See Findings of Fact, Conclusions of Law, and Order at 7, 9.) Thus, Mr.

Kepas’ claims are not barred by the exclusive remedy provision of the Workers’ Compensation

Act. (See id. at 8 (noting that “[a]lleged discrimination, harassment, or unfair labor practices

otherwise actionable at law may not form the basis of compensable mental stress claims under

[the Workers’ Compensation Act].”).)

4816-0212-7106/KE007-001 37

The evidence also shows that Mr. Kepas has presented sufficient evidence to preclude

summary judgment on the issue of causation. Indeed, the evidence shows that, although Mr.

Kepas first noticed a “noninvasive” noise in August 2005, the noise did not intensify until Ms.

Dutton and Ms. Jones escalated their campaign of harassment and discrimination. Indeed, Mr.

Kepas testified that the “noise had taken off and became very, loud, high-pitched screeching like

a squealing of brakes sound in [his] head” in January 2006 after Ms. Dutton reassigned two of

his direct reports to herself and began telling Mr. Kepas that Ms. Jones disliked him (Kepas

Depo. at 128, 140.) Mr. Kepas sought medical help from the eBay mental health hotline because

he thought he was “going crazy.” (Id. at 128, 132.) On February 15, 2006, Mr. Kepas visited

Dr. McDermott and reported that the noise was “getting worse.” (See Intermountain Health Care

IDX Clinics Clinical Notes, dated February 15, 2006.) Based on his evaluation of Mr. Kepas,

Dr. McDermott stated that Mr. Kepas was unable to work due to his present condition. (See

Attending Physician Statement—Non-Specific Condition, dated February 24, 2006.) Mr. Kepas

returned to Dr. McDermott on March 10, 2006, and Dr. McDermott noted that Mr. Kepas was

diagnosed with [Post Traumatic Stress Disorder], panic, anxiety and depression, insomnia ppt by

sexual harrisment [sic].” (Intermountain Health Care IDX Clinics Clinical Notes, dated March

10, 2006 (emphasis added).) Dr. McDermott also noted that “patient has been advised by

psychology and psychiatry to not return to the prior work environment that precipitated his

symptoms, symptoms occurring at the workplace due to [Post Traumatic Stress Disorder]

inability to focus, shortness of breath, tremor, slurred speech, fear unable to function due to fear

of reprisal at work.” (Id. (emphasis added).) Thus, Dr. McDermott’s diagnosis does indicate

4816-0212-7106/KE007-001 38

that the exacerbation of Mr. Kepas’ tinnitus was caused by the discrimination and retaliation he

suffered while at eBay.

Moreover, both Mr. Kepas’ treating audiologist and eBay’s expert witness agree that Mr.

Kepas does have tinnitus and that tinnitus can be exacerbated or intensified by stress. (See

Supplemental Report of Dr. Frank M. Warren, dated February 25, 2008, at 4, 5; State of Utah—

Labor Comm’n, Summary of Medical Record, dated April 12, 2006, (stating that “[i]ncrease

stress puts pressure on the autonomic nervous system which exacerbates tinnitus which can make

the perception of intensity and severity increase causing the tinnitus to intrude on everday life

functions such as ability to concentrate, etc.”).)12 Clearly, Dr. McDermott’s diagnosis, when

viewed in conjunction with Drs. Garrett’s and Warren’s conclusions that tinnitus can be

exacerbated by stress, demonstrate that Mr. Kepas has presented sufficient evidence to establish

genuine issue of fact as to whether the harassing and retaliatory conduct directed at him by Ms.

Dutton and Ms. Jones resulted in the exacerbation of the tinnitus.

eBay suggests that Mr. Kepas’ condition could have been caused by other factors, such as

Mr. Kepas Lasix medication. However, the evidence actually demonstrates that Mr. Kepas’

tinnitus was not a result of his medication. (See Supplemental Report of Dr. Warren at 4, 5

(“[Mr. Kepas] does not have any evidence of hearing loss. . . . [Lasix medication] has been

shown to cause tinnitus and hearing loss in cases. I was unable to find any specific case reports

where a patient did not have any hearing loss but did have tinnitus.”). Moreover, because Mr.

12 Both Dr. Garrett and Dr. McDermott have been designated as expert witnesses in this case.

4816-0212-7106/KE007-001 39

Kepas has presented sufficient evidence to establish a genuine issue of fact regarding causation,

such speculation is insufficient to warrant summary judgment.

Finally, eBay argues that there is no proof that Mr. Kepas’ injury is a permanent injury.

However, both Dr. McDermott and Dr. Garrett determined that Mr. Kepas’ injury was

permanent. (See State of Utah—Labor Comm’n, Summary of Medical Record, dated April 12,

2006, signed by Dr. Garrett; State of Utah—Labor Comm’n, Summary of Medical Record, dated

April 26, 2006, signed by Dr. McDermott.) Moreover, after reviewing Mr. Kepas’ medical

records, Kristy Farnsworth, Ph.D., determined that Mr. Kepas had an impairment rating of 24%

to 56%. (See Preliminary Rehabilitation Evaluation and Life Care Plan at 13.) Thus, Mr. Kepas

has presented evidence to establish a permanent injury due to eBay’s conduct.

CONCLUSION

As discussed above, Mr. Kepas has presented substantial evidence to support each of his

claims of discrimination and harassment. Moreover, Mr. Kepas has presented substantial

evidence demonstrating that eBay’s proffered reasons for the challenged actions are pretextual.

As such, eBay’s motion for summary judgment should be denied. Additionally, because eBay’s

adopted internal policies and procedures formed a contractual promise between eBay and Mr.

Kepas, Mr. Kepas is entitled to recover damages for eBay’s breach of contract and the covenant

of good faith and fair dealing. Finally, Mr. Kepas has presented evidence to demonstrate that his

physical injuries were caused by eBay’s conduct. Therefore, eBay’s motion for summary

judgment should be denied.

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Dated this ___ day of May, 2008.

_______________________________________D. Scott CrookKathryn J. SteffeySMITH HARTVIGSEN, PLLCAttorneys for Emmanuel D. Kepas

4816-0212-7106/KE007-001 41

CERTIFICATE OF SERVICE

I hereby certify that on this ______ day of May, 2008, I caused to be sent, via e-mail, a

true and correct copy of the MEMORANDUM IN OPPOSITION TO RESPONDENT

EBAY INC.’S MOTION FOR SUMMARY JUDGMENT addressed as follows:

Mathew Durhammmdurham@stoel.comJustin B. Palmerjbpalmer@stoel.comSTOEL RIVES LLP201 South Main Street, Suite 1100Salt Lake City, UT 84111

__________________________________________D. Scott CrookSMITH HARTVIGSEN, PLLCAttorneys for Claimant

4844-8271-1810/KE007-001 42