Two married couples — Geoff and Rebecca Scott and Ryan Graham and his wife — decided to start Track 7 Brewing Company in 2010. At this time, craft beer was not trendy, and there were fewer than 10 breweries operating in the region.
Nearly a decade later, and Track 7 is now one of the largest of the region’s 80-plus breweries, boasting several dozen employees and a second location inside a massive warehouse near Natomas. Track 7’s website says it now distributes beer from Los Angeles to Pennsylvania, and the brewery is often credited with helping spark the city’s craft beer wave.
But turmoil has been brewing behind the scenes, according to a lawsuit filed on February 19 by one of the couples.
The Scotts are accusing Graham, his wife and several of Track 7’s founding investors of wrongful termination.
The suit also includes accusations that Graham made “offensive sexual remarks” toward Track 7 workers, including incidents that may have resulted in a confidential settlement with a female employee.
“He’s lucky ‘Me Too’ didn’t happen six months earlier,” said former Track 7 director of sales Doug Woodward of Graham’s alleged actions.
Graham, who is currently Track 7’s chief executive officer, wrote in a statement that he was “saddened” by the litigation filed by his former partners.
“This action represents their perspective and we respectfully disagree with the assertions made,” Graham wrote. “There will be a proper venue and future opportunity for us to appropriately respond and we will do so at that time.”
The Scotts claim that, when they tried to hold Graham accountable for his alleged behavior, he retaliated by orchestrating a power-grab that resulted in the loss of their jobs, income and investment in the brewery.
“The Scotts have always championed and supported a workplace free from harassment and retaliation,” the couple’s attorney Martin Jensen wrote in a statement. “It is therefore ironic that, as the leaders of Track 7 who supported a proper and lawful workplace, they have been retaliated against so brazenly by their former business partners.”
The suit, alleges incidents of misconduct by Graham against one female employee. (CapRadio is not publishing the woman’s name since the suit claims she is a victim of sexual harassment.)
Because Graham’s wife was Track 7’s human-resources director in 2016, when these incidents allegedly occurred, the brewery commissioned an independent law firm, Van Dermyden Maddux, to investigate the accusations. The law firm says it interviewed 10 employees, and its findings are included in the lawsuit.
On one occasion, in 2015, Graham allegedly had been drinking and asked the female employee for a ride home. She drove while a male co-worker sat in the front seat and Graham in the back.
During the ride, the law firm’s reports that Graham began to look through a pile of the female employee’s laundry, then stated several times “Where are your panties? Are they in here? I want to see them.”
In a separate October 2016 incident, which allegedly occurred during a company trip to the Great American Beer Festival in Colorado, the law firm found that Graham made a “series of sexual comments” while on a taxi ride with the same female employee, her mother and other Track 7 employees.
It alleges that Graham stated that he “likes purple nipples,” then asked the female employee and her mom if they had purple nipples, and if they needed to be “released.”
The law firm’s findings cite five total incidents of “offensive sexual remarks” and “offensive physical conduct,” in addition to other instances when Graham allegedly engaged in hostile or “threatening” workplace behavior.
The Scotts’ lawsuit alleges that Graham hired an attorney and reached a confidential settlement with the female employee in October 2017.
“As with all of our employees, Track 7 does not comment on the the circumstances surrounding the departure of former employees and we will not do so in this matter,” Graham wrote in response to CapRadio’s inquiry about details in the lawsuit.
The female employee declined to speak with CapRadio.
Woodward, who is cited in the lawsuit as a witness, says he was director of sales at Track 7 during this time. In an interview with CapRadio, he said that co-workers discussed Graham’s alleged actions after they returned from the festival.
Geoff and Rebecca Scott claim that efforts to hold Graham accountable for the law firm’s findings led to them being pushed out of Track 7. In the lawsuit, they claim to have not received any compensation as founding investors since they lost their jobs in May of 2018.
Both filed claims with the state Department of Fair Employment & Housing, which is often a precursor to litigation.
The couple wants a judge to declare that they are owed damages befitting a 40 percent interest in Track 7, plus punitive damages and legal fees.
“The Scotts view litigation as a last resort and they are saddened and anguished to have to take this very public recourse involving a company that they truly love and support,” the couples’ attorney Martin Jensen wrote.
Graham wrote that, until he has the opportunity to respond to the lawsuit, “Track 7 will continue to focus on the great employees and quality products that we provide.”
Bob Moffitt contributed reporting to this story.
