PHD responds to a charge of gender and age discrimination filed by Jeffrey Priest, explaining that Priest's position of Service Manager was eliminated in October 2007 as part of cost-cutting measures due to financial struggles, and the later appointment of a younger woman to a modified Service Manager position was a temporary solution and not discriminatory. PHD maintains policies against discrimination and had a diverse workforce in terms of age and gender, noting most employees were over 40 and the majority were men.

1. August 7, 2008
Via Federal Express
Ms. Bess Y. McClain
Department of Fair Employment and Housing
1515 Clay Street, Suite 701
Oakland, CA 94612
Fax: 510-622-2952
RE: Priest v. Peninsula Harley-Davidson, Inc.
DFEH File No. E200708A1130-00-ase/37AA804292
Dear Ms. McClain:
We represent Peninsula Harley-Davidson, Inc. (PHD) and take this opportunity to
respond to the charge of gender and age discrimination filed by Jeffrey Priest on
May 22, 2008.
Mr. Priest bases his claim on PHD’s October 2007 decision to eliminate the position
of Service Manager and PHD’s subsequent March 2008 decision to reinstate this
position in a modified format and to give this title to another employee, a younger
woman. As will be demonstrated below, there is no merit to Mr. Priest’s
discrimination claims.
Peninsula Harley Davidson (“PHD”)
Located in Redwood City, California, PHD is a retail seller and service provider for Harley
Davidson and Buell motorcycles. PHD is owned by Chuck Cooke and Christie Loftus.
Cooke is the President, and Loftus is the general manager of the dealership.
PHD’S Policies Against Discrimination
PHD is an equal opportunity employer and is committed to maintaining a workplace free
of discrimination and harassment. Toward this end, PHD maintains express policies
prohibiting discrimination and harassment based on age and sex, among other protected
categories. These policies include a formal complaint procedure, which incorporates
PHD’s commitment to investigate all allegations of discrimination or harassment, and
employees are encouraged to report incidents of which they have knowledge. (See Ex.
__, Employee Handbook, pg. __)

2. Gender and Age Composition of PHD Workforce in 2007
Over the course of 2007, PHD employed a total of thirty-five people. Of these thirty-five,
at least twenty-two were over the age of forty and twenty-two were men. In particular,
PHD employed nine persons in the Parts Department. Of these nine, at least five were
over the age of 40 and seven of the nine were men. PHD employed 13 persons in the
Service Department. Of these 13, at least 9 were over the age of 40 and twelve of the
thirteen were men. PHD employed seven persons in the Sales Department. Of these
seven, at least five of the seven were over the age of 40 and three of the seven were
men.
Following the elimination of Jeff Priest’s position in October 2007, of the six remaining
service department employees, five were older than Priest and were making
approximately the same in salary.
Employment Background
Jeff Priest was hired as an at-will employee on or about July 11, 1995. During his
employment with PHD, Priest signed at least two acknowledgments of his at-will status.
(See Exhibit ___, 6/16/96 signed acknowledgment; and Exhibit ___, 10/10/02 signed
acknowledgment.)
Mr. Priest began his employment with PHD as a service technician. On February 14,
1997, he was promoted to the position of Service Manager. Mr. Priest received
increases in pay throughout his employment. On July 11, 2005, his rate of pay increased
to $25.00 per hour where it remained for the remainder of his employment with PHD.
Beginning in or around 2001, Priest began expressing his desire to make a change in his
life. He announced that he was going to resign and return to Ohio to care for his mother.
PHD encouraged Priest to take some time off and reconsider his decision. Priest did so
and decided to stay at PHD.
This pattern of wanting to quit and then reconsidering continued each year. Priest
appeared to be less and less satisfied with his job, would remain in his office for hours
and less frequently interacted with both coworkers and customers. During this time,
Priest admitted that he knew that he was not doing a very good job and would leave if
PHD decided to go in a different direction.
Priest’s position was eliminated on October 26, 2007.
2007 Financial Struggles of PHD
Likely the result of increasingly difficult economic times in the Bay area, PHD was losing
money on an almost monthly basis in 2007. Profit from busy summer months was
usually enough to carry the business through slower winters, but this was not the case in
2007.
In response to the continued monthly losses and in order to survive the upcoming winter,
PHD owners Cooke and Loftus began to implement a series of cost saving measures in
October. In addition to reducing staffing, PHD owners also asked the landlord for rent
relief, discontinued janitorial services, took personal pay cuts of approximately 15% and
ultimately put the business up for sale.

3. The reality of PHD’s 2007/2008 financial situation is further evidenced by its placement
by Harley-Davidson Motor Company (“HDMC”) on a “Dealer Performance Campaign.”
Under this program, HDMC strictly monitors and evaluates the continuing performance of
the dealership. PHD received its first letter giving notice of its placement in this program
in November 2007 and has continued to receive letters regarding its continued placement
in 2008. (See Exhibits __, Letter dated Nov. 8, 2007; Exhibit __, Letter dated March 3,
2008; Exhibit __, Letter dated June 16, 2008.)
PHD’s Elimination of Position of Service Manager
In furtherance of their decision to cut back on personnel to reduce overhead, Cooke and
Loftus reviewed the employment rosters, analyzing both a person’s salary as well as his
or her position and contribution to the business. Based on this analysis, the owners
concluded that one of the positions that could be eliminated was that of Service Manager,
Jeff Priest’s position. Four other employees were also laid off at this time.
On October 20, 2007, Loftus notified Priest that his position was going to be eliminated
due to the dealership’s financial situation. She explained to him that she was not going to
be hiring a replacement Service Manager at that time and that Loftus would be stepping
in as acting manager for the foreseeable future.
Priest seemed to accept this news well and stated that he was aware of PHD’s financial
situation and had been preparing for this possibility for a while. He added that he already
had his resume on internet hiring sites, was following possible job leads and might take
steps to fulfill a long term desire to move back to Ohio. Priest’s last day of work was
October 26, 2007, and PHD threw a going away party in his honor.
His wife, Sue Newman, the Finance and Insurance Manager at PHD, submitted her letter
of resignation on November 7, 2007. Her last day of work was November 23, 2007.
Priest and Newman moved to Ohio shortly after their departure from PHD.
Promotion of Andrea Venema
Loftus continued to perform the role of acting service manager until March 2008. During
this time, she was supported by Assistant Service Manager Andrea Venema and co-
owner Cooke. In March 2008, the title of “Service Manager” was passed on to Venema.
Her “promotion” had nothing to do with her age or gender. In fact, upon his departure,
Priest suggested that PHD use Venema as his replacement until the company decided
how to proceed, given its current financial state.
While Venema’s new title was “Service Manager,” her duties and responsibilities did not
mirror those of Priest. Cooke and Loftus decided that, in this position, Venema would
function in dual roles as both Service Advisor and Manager. Loftus would continue to
perform much of the financial reporting that was previously the responsibility of the
“Service Manager” and Cooke would continue to provide support to help Venema run the
department. Venema accepted these additional responsibilities without pay increase.
Prior to her promotion, she was being paid $20/hr, and she continues to be paid at this
rate.

4. Cooke and Loftus continue to see Venema’s position as a temporary solution to their long
term business need for a more highly trained and competent service manager. However,
at this time, with assistance from Cooke and Loftus, Venema is able and willing to
perform many of the duties previously handled by the Service Manager/Priest and does
so at the rate of $20/hour. Given PHD’s continuing financial struggles, the present
arrangement satisfies the immediate needs of the company.
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Conclusion
Jeff Priest has asserted claims of discrimination that are entirely without merit. It is
respectfully requested that the DFEH issue a “no cause” finding, close its files and
issue Mr. Priest his “right to sue” notification.
Very truly yours,
CASAS RILEY & SIMONIAN, LLP
Gregory C. Simonian
gsimonian@legalteam.com
GCS/mc