Gyulakian v. Lexus of Watertown, Inc.
475 Mass. 290
| Mass. | 2016Background
- Plaintiff Emma Gyulakian worked as a finance manager at Lexus of Watertown from 2003 until her termination on January 4, 2012; her direct supervisor was Emmanuel Ferreira.
- Trial evidence described repeated, graphic verbal sexual comments and some physical touching by Ferreira over approximately eighteen months. Coworkers corroborated some misconduct.
- Lexus had a written sexual harassment policy directing employees to report complaints to specified managers or “any other member of management.” Gyulakian told an assistant manager (Bruno) about harassment before termination and, on the day of termination, reported it to senior managers and HR.
- A jury found Lexus liable under G. L. c. 151B for a sexually hostile work environment, awarding $40,000 compensatory and $500,000 punitive damages; the judge set aside the punitive award as a matter of law but left compensatory damages intact.
- The Supreme Judicial Court reviewed the grant of judgment n.o.v. as to punitive damages and (1) affirmed the compensatory award and (2) reversed the judge’s removal of punitive damages, reinstating the $500,000 punitive award and remanding for remittitur and attorney’s fees recalculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for compensatory damages | Gyulakian: harassment was pervasive, caused emotional distress and interfered with work | Lexus: plaintiff failed to show altered conditions or causation for damages | Held: Evidence sufficient; jury could find objective and subjective hostile environment and resulting emotional harm (compensatory award affirmed) |
| Availability of punitive damages against employer when supervisor caused harassment | Gyulakian: employer punishable for supervisor’s conduct regardless of employer’s knowledge; alternatively punishable for inadequate remedial response after notice | Lexus: punitive damages cannot be imputed to employer solely from supervisor’s actions unknown to employer | Held: Employer not automatically liable solely for a supervisor’s unknown misconduct; punitive damages available where employer was on notice and failed to take adequate remedial measures and such failure was outrageous or egregious (jury award reinstated) |
| Waiver of challenge to punitive damages | Gyulakian: Lexus preserved the issue by moving for directed verdict on liability and objecting to special verdict form | Lexus: did not specifically move for directed verdict on punitive damages, so issue waived | Held: Not waived—directed verdict motion on liability preserved punitive-damages challenge and Lexus timely objected to verdict form |
| Adequacy of Lexus’s investigation/remedy after notice | Gyulakian: management failed to follow policy, conducted a sham or biased investigation, and ignored corroborating information | Lexus: conducted an investigation that found no corroboration and disciplined appropriately | Held: Sufficient evidence for jury to find notice and inadequate/sham investigation (biased interviewer, failure to interview finance staff, failure to contact plaintiff) supporting punitive damages for employer conduct |
Key Cases Cited
- Haddad v. Wal-Mart Stores, Inc., 455 Mass. 91 (2009) (sets factors for punitive damages in employment discrimination and requires knowing violation plus outrageous or egregious conduct)
- College-Town, Div. of Interco, Inc. v. Massachusetts Comm’n Against Discrimination, 400 Mass. 156 (1987) (employer vicarious liability for hostile-work-environment damages and when failure to investigate supports liability)
- Trinh v. Gentile Communications, LLC, 71 Mass. App. Ct. 368 (2008) (investigation adequacy can defeat punitive damages where investigation is thorough and documented)
- Esler v. Sylvia-Reardon, 473 Mass. 775 (2016) (standard of review on judgment n.o.v.; hostile-work-environment analysis)
- Phelan v. May Dep’t Stores Co., 443 Mass. 52 (2004) (compensatory damages for hostile work environment require impact on workplace participation)
- Pine v. Rust, 404 Mass. 411 (1989) (punitive damages disfavored; purpose and standards)