Courts expect investigations into complaints of sexual harassment to be done timely, thoroughly, and objectively. These three requirements are the cornerstone of a proper investigation, and ultimately, an employer’s defense to claims of sexual harassment. When these three requirements are not met, courts find in favor of the plaintiff and award large amounts in damages and attorney’s fees.
In Gyulakian v. Lexus of Watertown, the Massachusetts Supreme Court upheld a verdict against an employer for $40,000 in compensatory damages and $500,000 in punitive damages for failing to adequately investigate and take remedial measures after being put on notice about a sexually hostile or offensive work environment. Because the court found that the failure was outrageous and egregious, the $500,000 award for punitive damages was upheld. The employer was also ordered to pay the plaintiff’s attorney’s fees.
The plaintiff, a finance manager, was terminated in 2012. She had worked for Lexus for nine years. During her termination meeting, she reported that her supervisor had sexually harassed her and cultivated a sexually hostile work environment. The plaintiff reported the same conduct to the human resources manager that same day. While she had not previously complained to the people involved in her termination, she had reported the offensive conduct several times to her supervisor’s supervisor during the previous 18 months.
The employer responded by having a friend of the accused conduct an “investigation.” The investigator admitted during testimony that he did not believe the complainant and finished his investigation after just two interviews. He found no corroboration of the complainant’s claims of sexual harassment.
The court found that the employer was put on notice when the employee complained to her supervisor’s supervisor and when she complained at the time of her termination meeting. The court also found that the employer failed take appropriate remedial measures after being put on notice of the complaint of sexual harassment. In the first instance, the supervisor’s supervisor failed to notify human resources when the plaintiff complained to him during the last 18 months of her employment. The court also found that the workplace investigation conducted by Lexus was a sham.
The court was particularly concerned that the investigator uncovered no corroborating evidence even though a former office manager had circulated a memorandum regarding this manager’s previous inappropriate behavior.
By failing to take these remedial measures, the court found that the imposition of $500,000 in punitive damages along with attorney’s fees was appropriate.
The takeaway from this case is two-fold. First, notice of sexual harassment by the plaintiff during their termination meeting triggers an employer’s requirement to conduct a thorough, objective, and timely investigation. Second, a proper investigation is seen as a remedial measure that can provide an employer an effective defense against claims of harassment and discrimination.
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