'No' gets no firmer than a $37m lawsuit

K risty Fraser-Kirk was allegedly advised that if she wanted her boss, the chief executive of David Jones, to stop sexually harassing her, she would "just need to be very clear and say 'No, Mark"'. So she has.

"No" gets no firmer than a $37 million lawsuit and Fraser-Kirk was right about her case this week when she said "this is not just

about me".

Risky, audacious or courageous, the $37 million punitive claim against the retailer, its directors and its former chief executive, Mark McInnes, is unprecedented. Whatever direction the case takes, it is set to be a watershed for corporations and sexual harassment in Australia.

The figure is unusual for two reasons. Its sheer size is light years away from usual payouts in such cases and the nature of the damages sought is equally rare. It is designed as punishment, beyond general compensation damages for actions so egregious they warrant the extra penalty - unheard of in discrimination cases in Australia.

Many believe Fraser-Kirk and her lawyers at Harmers Workplace have played the figure well. She has pledged to give it all to an as-yet unknown charity for harassment victims, should she win. Her lawyers say they are working

pro bono.

She has not specified the amount of money she is also seeking in her claim for general loss and damages.

There is, however, a risk that the figure is so outrageous that it can only be seen as a publicity stunt - that it will alienate Fraser-Kirk from some would-be supporters.

Margaret Thornton, a professor of law at the Australian National University, specialises in discrimination law and policy. She says the high profile of this case would undoubtedly encourage other women to speak out.

"The typical response of women who've been sexually harassed is simply to resign," Thornton said.

Somemight endupwith a small settlement and look for another job, but seeing a 27-year-oldwoman seeking a $37 million penalty could change that.

Clearly theres a political strategy in bringing attention to the fact that this sort of action is just totally unacceptable and that the person should be punished, that it goes beyond compensation, Thornton said.

Thats certainly a very interesting dimension, to really highlight the case that its not just another pinch behind the strongroomdoor and that you just give the person a few dollars to keep quiet. Before the claim was lodged this week,McInnes had resigned and left the country.He was paid out $2 million.His spokeswoman has denied rumours he is attending a sex treatment clinic.

The $37 million message is also likely to resonate with employers, Thornton says. A huge percentage of women, if not most, have actually been subjected to some formof sexual harassment in the workplace . . . this is going to have an enormous ramification. David Jones is confident it is covered by insurance, and that the $37 million claim will have no impact on the expected growth of its profits in this year and next.

Ina smaller, yet relatively large victory,MalgorzataPoniatowska recentlywon$466,000 fromher employer,EmploymentServices Australia, in a discrimination claim upheld by theFederalCourt of Appeal.Most of the time, damages awarded are far less  asDavid Jones was quick to point out thisweek.

The retailer sent journalists a list of recent cases, showing damages awarded more commonly ranged between $2000 and $24,000.

According to figures fromThornton, in the 2007-08 financial year, 612 sex discrimination claimswere lodged in Victoria, and 288 inNSW. A further 857were lodged with the AustralianHumanRightsCommission.

Most involved sexual harassment or pregnancy.

Yet just 1 per cent of claims progressed to a hearing; mostwere settled. Fewcan bear the financial risk of taking on their company.

If Fraser-Kirk loses after a trial, she could be liable for hundreds of thousands of dollars.

Her spokesman, Anthony McClellan, said, Thats a matter between Kristy and her lawyers. The $37 million figure sought represents 5 per cent of the $700 million in profitsDavid Jones made in seven years underMcInnes, and another $2 million fromMcInnes, 5 per cent of his salary.

There is no established standard of 5 per cent. We believe that was a reasonable level of penalty for the culture of sexual misconduct, harassment and bullying atDavid Jones,McClellan said.

This case is different in other ways too. Fraser-Kirk has joinedMcInnes personally as a respondent, although most claims target only the employer, using awellestablished principle of vicarious liability. Also, unlike the hundreds of claims lodged each year, this one is not being fought under the Sex Discrimination Act.

Instead, Fraser-Kirk seeks to prove breaches of her employment contract, the Trade Practices Act, tort law and equity law, in the FederalCourt.

Fraser-Kirk is claimingDavid Jones and/orMcInnes breached their duty of care to her by exposing her to unnecessary risks, and that McInnes trespassed upon her by placing his hand under clothes and touching her bra strap, also by lifting her up in a hug and trying twice to kiss her on the mouth  causing her loss and damage.

She claimsDavid Jones breached the FairTradingAct when, after the mattercameto public attention, the retailer and its directorsmade misleading statements that there was not a culture of sexual harassment in thecompany. She claims four other womenwere victims ofMcInness behaviour and thatDavid Jones knew of three.

JoshBornstein, a partner with the law firmMauriceBlackburn, is representing two air-traffic controllerswhoclaim Air ServicesAustralia allowed extremesexual discrimination and bullying. Thewomenare seeking more than $1 million each.

Bornstein is also running his case in the FederalCourt, rather than the HumanRightsCommission, which deals solely with discrimination.But he is not seeking punitive damages.

He says the punitive damages are an interesting approach to public relations but hes bearish about whether they will be awarded.

Most cases of substance in this area tend to settle. If there is substance to the allegations,my money is on a settlement  and the fact that itsDavid Jones, who are probably very sensitive to adverse publicity, I think probably enhances that possibility even more. Harmers represented Christina Rich against PricewaterhouseCoopers.

Rich sought $11 million and settled for an undisclosed amount.

Thornton said she also suspected the extraordinary case might not make it to court. Its so far beyond anything thats ever been awarded, I think the company will be desperate to settle. Mark McInnes ... former CEOof DJs.