A $95 million award to an Illinois woman — believed to be the largest ever in a single-plaintiff sexual harassment case — was not the product of a “runaway jury” but a runaway corporation that covered up the predatory behavior of a manager.

Ashley Alford

Ashley Alford won the award, which includes $15 million in compensatory damages and $80 million in punitive damages, from a federal court jury that found Aaron's Inc. (NYSE: AAN), a rent-to-own company, liable for the abuse she suffered while working at its Fairview Heights, Ill., furniture store.

The harassment allegedly culminated in October 2006 with the store manager, Richard Moore, flinging Alford to the floor of the store, lifting her sweatshirt and masturbating over her while he pinned her down. He is now awaiting trial on a charge of criminal sexual abuse.

Aaron's, which is based in Atlanta, conceded nothing after the verdict. “We feel strongly that this verdict is the result of a decision made by a classic runaway jury,” Chad Strickland, vice president of associate resources, said.

But the company only has itself to blame. Alford called Aaron's “Non-Discrimination and Harassment Hotline” six months before Moore allegedly assaulted her. And a district manager only told Moore to “watch [his] back” after, in a violation of company policy, questioning Alford in his presence.

“The record suggests that Aarons failed to react to Alford's complaints and did not seriously investigate them until after Aarons received word that Alford had been assaulted and that Moore had been arrested,” U.S. District Judge Michael J. Reagan said in an order allowing the case to go to trial.

The damages on Alford's federal claim are capped at $300,000, leaving her with a net recovery of $41.3 million (see table). But that would still be one of the largest sexual harassment verdicts ever.

“This company has always denied responsibility and continues to deny its responsibility to its workers,” said lawyer Judy L. Cates, who originally filed Alford’s suit.

Alford alleged that Moore began pinching her and making uninvited advances soon after she was hired in October 2005. She called the hotline in April 2006 but had to leave a voicemail message. The call went directly to the phone of Vanessa Adams, an employee relations specialist in Atlanta, who testified she did not always answer when the phone rang.

Aaron's admitted that only about 11 percent of sexual harassment calls to the hotline per month were answered.

At some point after Alford's hotline call, District Manager Brad Martin questioned her in Moore's office. Because Moore was present, she said in her lawsuit, she declined to respond and Martin then dismissed her from the meeting, telling Moore “to 'watch his back' because Plaintiff had made several complaints.”

But during the fall of 2006, Moore allegedly approached Alford from behind as she was sitting on the floor of a stock room, “removed his penis from his pants and proceeded to hit Plaintiff on the top of her head with his penis.”

Aaron's finally sprang into action on Oct. 12, 2006 when Moore was arrested for masturbating over Alford. “Within hours ... Vanessa Adams traveled from Atlanta to investigate Alford's allegations,” Judge Reagan noted.

The jury indicated its outrage by awarding the $80 million in punitive damages — $30 million on Alford's state law claims for negligent supervision and intentional infliction of emotional distress and $50 million on her federal sexual harassment claim.

“[A] reasonable trier of fact could conclude that ... Aaron’s, through its agents, deliberately covered up or was willfully blind to intentional discrimination in violation of [her] federally protected rights,” Reagan said in an order finding the company could be liable for punitive damages.

In deciding the damages, jurors were told that Aaron's was worth $980 million and made $118 million last year in profit. The verdict also includes $1.5 million in compensatory damages on Alford's assault claim against Moore.

By Matthew Heller
6/17/11