A recent decision in the Massachusetts Supreme Judicial Court in the case of Emma Gyulakian vs. Lexus of Watertown, Inc. provides a good lesson to management who witness sexual harassment yet do nothing of it because the victim has not reported it. Gyulakian had been in her successful role as a finance manager at Lexus yet she was fired on January 4, 2012 because, as the general manger testified, her relationship with her co-workers had deteriorated. While at the firing meeting, Gyulakian reported to the general manager and the general sales manager, that during her tenure at the finance department, her direct supervisor, Emanuel Ferreira, sexually harassed her and cultivated a sexually hostile and offensive work environment. Gyulakian also reported that same conduct to the human resource manager later that day. Prior to that day on which she was fired, Gyulakian had not reported the harassment to the general manager or the human resource manager, however, she had informed the assistant general sales manager on numerous occasions about various sexually offensive incidents over the course of the previous 18 months. After firing Gyulakian, Lexus purportedly conducted an investigation which uncovered no corroboration of her allegations and Ferreira was not disciplined.
The jury found the car dealership liable for $40,000.00 of compensatory damages and concluded that Lexus acted intentionally or with reckless disregard for Gyulakian’s rights under the discrimination laws and, therefore, also awarded Gyulakian $500,000.00 in punitive damages against the dealership. The car dealership requested the trial court set aside the jury verdict of punitive damages and the trial court did so. On appeal the Massachusetts Supreme Judicial Court reinstated the punitive damages subject to the trial court considering whether the $500,000 was too high but not to consider whether or not punitive damages, which are to punish the dealership, were appropriate. The dealership, in part, claimed that Gyulakian’s evidence was insufficient to warrant any compensatory damage because she did not show her work performance suffered as a result of the harassment. However the evidence she submitted was quite stunning, including stating that Ferreira would often comment about her breasts and buttocks with crass terms. Even had sexual harassment training, Ferreira commented to Gyulakian about how harassment sounds like “her a..”. Gyulakian also testified that Ferreira touched her buttocks and on other occasions Ferreira would attempt to throw coins down Gyulakian’s blouse. The evidence at trial showed that Lexus’ general sales manager, witnessed Ferreira’s attempt to throw coins down Gyulakian’s blouse.
Under sexual harassment employment discrimination law, employers have an obligation to investigate evidence of and prevent sexual harassment in the workplace. Employers cannot turn a blind eye to sexual harassment that is taking place in the workplace just because the target of the harassment has not yet complained. Failure to prevent sexual harassment may result in exposure to substantial damages to the employer as the owners of the Lexus car dealership in Watertown, Massachusetts learned. Also allowing sexual harassment in the workplace adversely affects employee morale and productivity, and sexual harassment complaints and litigation are bad for public relations of the employer. Last but not least, preventing sexual harassment in the workplace is the right thing to do and owners and managers need to step up and pay attention and make sure that they are sufficiently trained in preventing and stopping it. Mad Men was a fun series but so was Breaking Bad. Both provide solid examples of what not to do in the workplace.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].