David Jones Ex-CEO McInnes settles harassment charges

David Jones Ltd. and former Chief Executive Officer Mark McInnes agreed to pay A$850,000 ($840,000) to settle claims of sexual harassment from a former publicist, the largest amount made public in such a case in Australia.

David Jones, Australia's second-biggest department store operator, will pay most of the settlement, with McInnes paying a portion, the Sydney-based company said in a statement, without elaborating.

The settlement, 2.3 percent of the A$37 million Kristy Fraser-Kirk sought in a federal court lawsuit, compares with the A$466,000 a federal judge awarded in June 2009 to Malgorzata Poniatowska for sexual harassment and wrongful termination at Employment Services Australia Ltd. A woman who was raped at her workplace received A$492,000 in the biggest sexual harassment award in Australia, according to Lawyers Weekly.

"It's a large settlement for a sexual harassment case," Gerard Phillips, the national practice group leader at Middletons Workplace Relations Group, said in a phone interview. "Traditionally, plaintiffs get a very modest return."

Fraser-Kirk, 27, sued in August claiming McInnes, 45, made unwelcome sexual advances at two company functions, including putting his hand under her clothing and trying to kiss her. The company and its directors ignored her complaints and failed to enforce rules against sexual harassment, Fraser-Kirk said.

'Difficult journey'

She sought 5 percent of the company's profit and McInnes's earnings from 2003 to 2010, amounting to about A$37 million. She said the money would be given to charity.

"This has been a difficult journey but one that I felt was important," Fraser-Kirk wrote in an e-mailed statement today. "The case has led to real debate taking place which I am confident will lead to change."

McInnes said "the vast majority" of Fraser-Kirk's allegations were untrue and that the lawsuit was an abuse of the legal process. He said in court papers that Fraser-Kirk initiated sexually suggestive banter at a June 7 function and that he did nothing wrong in inviting her for a drink at a restaurant.

"I welcome today's settlement," McInnes said in an e- mailed statement. "It brings to an end a difficult time in many people's lives."

Fraser-Kirk's settlement may not be a precursor of future awards, said Phillips, who wasn't involved in the case. Her decision to take on an iconic department store and McInnes having quit created an "almost perfect litigation storm," he said.

Future cases

Future plaintiffs may not be willing to be chased by the media and have their pictures in the papers and on television as Fraser-Kirk has, Phillips said. Companies also won't be as willing to remove people who are being complained about, since that didn't make a difference in this case and may have been taken as admission of wrongdoing, he said.

McInnes, who quit in June following Fraser-Kirk's complaints, said he plans to resume his career next year. He didn't say what he plans to do.

Fraser-Kirk said she won't be able to give money from the settlement to charity and that she plans to participate in charitable work in the future.

(Published by Bloomberg - October 17, 2010)