Red Lion Hotels, Lithia Motors face lawsuits involving sexual harassment claims

Two companies with large presences in Spokane face lawsuits from women who allege sexual harassment by male bosses.

One woman, Dana Divine, who spent more than six years as national sales director for Red Lion Hotels Corp., claims the company fired her in December for reporting the sexual harassment of another female employee by a male executive. She claims the company then continued to retaliate by making it harder for her to collect unemployment benefits. Red Lion Hotels was founded in Spokane and recently moved its headquarters to Denver.

In a separate case, Evette Burgess, who worked at BMW of Spokane, claims she was denied equal pay, routinely sexually harassed by two store managers and wrongfully fired while on medical leave. The BMW retailer, at 215 E. Montgomery Ave., is part of Oregon-based Lithia Motors Inc., which has about 200 employees at four stores in the Spokane area. Lithia says one of the managers was fired for his behavior, and the other was disciplined.

Both women are represented by attorney Mary Schultz, whose previous clients include ousted Spokane police Chief Frank Straub and four women who won a gender-discrimination lawsuit against the Spokane Country Club.

Red Lion Hotels

The complaint against Red Lion Hotels, filed last week in Spokane County Superior Court, states that Divine promptly reported an incident of sexual harassment on Dec. 6 while at a corporate event in Las Vegas.

She said she witnessed a company vice president grab a female subordinate – a general manager at a Red Lion location in Western Washington – and pull her down onto his lap before telling her to have some of his drink.

“Ms. Divine reasonably perceived the incident as sexual harassment and reported the event to (a human resources officer, Lori Castro),” the complaint states. “The incident reported would constitute not just sexual harassment but an assault.”

Back in Spokane on Dec. 11, Castro asked Divine to recount the incident in more detail, and she did, the complaint states. Two days later, Divine’s boss, Harry Sladich, called her into his office and fired her with Castro present.

Sladich holds the title of executive vice president for franchise operations and global sales. He joined Red Lion Hotels in 2010 after five years leading the Spokane Regional Convention and Visitors Bureau, a nonprofit tourism agency. The executive accused of sexual harassment joined the company in 2016.

According to the complaint, Sladich told Divine she was being fired for reporting the alleged sexual harassment, saying her account “was untrue because no one supported it.” He also “admonished her for reporting the incident to corporate’s HR department, and not to him.”

The complaint suggests the company’s investigation into her allegations was inadequate and “intended to send a message to other employees that such reporting would not be tolerated.”

In an email, Schultz added: “We have no evidence that any investigation was ever done. Red Lion’s having a male executive vice president ask a female employee if another male executive vice president harassed her is not an HR investigation.”

Reached by phone Tuesday, Sladich referred questions to Beth Kennar, a lawyer for Red Lion Hotels. Kennar said the company had not yet been served with the complaint and could not comment on the allegations “line by line.” But she said she’s confident the company acted appropriately.

“I don’t believe Ms. Schultz received all the information that’s relevant to this case before filing the complaint,” Kennar said.

The complaint also describes harassment problems that arose last summer, when “a 23-year-old female receptionist under Ms. Divine’s supervision reported to Ms. Divine that she was continually having to fend off unwarranted sexual advances” by a married accountant.

Divine reported the man’s behavior to human resources, but he “was neither disciplined nor warned,” the complaint states. Other employees “were admonished that this situation should remain within HR,” and the young receptionist later resigned, it states.

The complaint states that Divine was a model employee who received bonuses for her work and “excellent” performance reviews. It states that on Dec. 12, the day before she was fired, Divine “was made a member of Red Lion’s President’s Circle – the highest level of sales honor within Red Lion.”

After Divine was fired, she filed for unemployment benefits. According to the complaint, Red Lion Hotels told Washington’s Employment Security Department that Divine had been dishonest in reporting the alleged sexual harassment, in effect “defaming her again in a state unemployment process to deny her benefits even there.”

She is seeking an unspecified amount in damages.

“Ms. Divine was a top-flight sales director, she reported a male executive’s use of a female employee for his own entertainment value, and she lost her job,” Schultz said in an email. “That’s real damage.”

Lithia Motors

The complaint against Lithia Motors, filed in Superior Court in January, details numerous lewd and sexually suggestive comments and gestures allegedly made by two managers at the Spokane BMW store.

Burgess, who handled finances for the store for nearly three years, claims that a midlevel manager, Ron Stratton, routinely commented on her looks and his own genitalia in vulgar terms. She also claims Stratton’s behavior was not only tolerated but encouraged by his boss, the general manager of the store.

Tom Dobry, Lithia’s chief marketing officer, said higher-ups “took immediate action” when Burgess alerted them to the managers’ behavior.

“We fired one individual named in the lawsuit. We disciplined another,” Dobry said. “We have zero tolerance for this type of behavior in any of our stores and throughout our company.”

The general manager, who was accused of unwanted kissing and other gestures, kept his job and did not respond to a message seeking comment. Lithia’s lawyers said in court filings that Stratton “was placed on unpaid leave and then discharged.”

In a phone call Thursday, Stratton, who now lives in Florida, said he had been friends with Burgess, denied many of her allegations and claimed he left the company on his accord.

“I got asked about some stuff and they cleared me,” said Stratton, who is not named as a defendant in the lawsuit. “Those things that she mentioned about me are totally false. I was 100 percent HR compliant.”

The complaint states that Stratton “used a marker to write derogatory comments and graphics on Ms. Burgess’s glass office wall separating her office from the general office area.” He denied this, too, claiming he wrote only motivational messages for his co-workers.

“I’m not a dumb person,” he said. “Why would I go around and put dirty stuff on the windows when there’s customers walking through?”

Lithia’s lawyers said in court filings that Burgess’ case should not move forward because her claims are covered under an arbitration agreement she signed upon joining the company in December 2014.

The parties dispute precisely how Burgess left the company, but they agree she went on medical leave last July and her employment ended in September. She claims she went on leave because her mental health deteriorated as a result of frequent harassment, and that she was wrongfully fired during that period of absence. The company claims she voluntarily resigned.

She, too, is seeking an unspecified amount in damages.