Supreme Judicial Court of Massachusetts, Middlesex
Heard: March 10, 2016.
action commenced in the Superior Court Department on January
10, 2013. The case was tried before Kimberly S. Budd, J., and
postverdict motions for relief were considered by her.
Supreme Judicial Court granted an application for direct
S. Mantell (Lori A. Jodoin with him) for the plaintiff.
Christopher J. Sullivan (Tory A. Weigand with him) for the
Rebecca Pontikes, Katherine Skubecz, Michaela C. May, &
Chetan Tiwari for Massachusetts Employment Lawyers
Association & others.
M. Templin for Women's Bar Association of Massachusetts.
Robbins & Martin J. Newhouse for New England Legal
Foundation & another.
Elizabeth S. Dillon for Massachusetts Defense Lawyers
Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, &
Lenk, JJ. 
December, 2014, a jury rendered a verdict in favor of the
plaintiff, Emma Gyulakian, finding that she had been
subjected to a sexually hostile or offensive work
environment, in violation of G. L. c. 151B (c. 151B), §
4 (§ 4) .The jury, having heard evidence tending
to establish that Gyulakian suffered relentless sexual
harassment by her direct supervisor, Emmanuel Ferreira, found
that the defendants, Lexus of Watertown, Inc., and Post
Motors, Inc. (collectively, Lexus), were liable for $40, 000
in compensatory damages for emotional distress, and,
concluding that Lexus acted intentionally or with reckless
disregard for Gyulakian's rights under the discrimination
laws, also awarded Gyulakian $500, 000 in punitive damages.
filed a motion for judgment notwithstanding the verdict
(judgment n.o.v.), or, in the alternative, for a new trial or
a remittitur. A judge of the Superior Court allowed the
defendant's motion for judgment n.o.v. in part, denying
the motion with respect to the jury's imposition of
compensatory damages but allowing it as to the award of
appealed on the issue of punitive damages, and Lexus
cross-appealed the award of compensatory damages. We allowed
Gyulakian's application for direct appellate review and
affirm the award of compensatory damages. We also reverse the
trial judge's ruling as to the punitive damages award,
because, based on the evidence at trial, the jury could have
found that, independent of the conduct of harassment engaged
in by its supervisory employee, Lexus failed to take adequate
remedial measures after being put on notice of a sexually
hostile or offensive work environment, and that that failure
was outrageous or egregious. The jury's award of punitive
damages is reinstated, and the matter remanded for
consideration of Lexus's motion for
Factual and procedural background.
jury could have found the following., 
was an employee of Lexus from 2003 through January 4, 2012,
when her employment was terminated. Between June, 2010, and
the end of her employment at Lexus, Gyulakian acted as a
finance manager, during which time Ferreira was her direct
supervisor. Ferreira, Lexus's finance director, was
responsible for assigning hours, vacations, and work flow,
and would carry out performance evaluations for all of the
finance managers. Ferreira recommended Gyulakian for the
finance manager position, and was included in the decision to
Gyulakian's success in her role as finance manager, her
employment at Lexus was terminated at a meeting on January 4,
2012, because, as Vincent Liuzzi, Lexus's general
manager, testified, Gyulakian's relationship with her
coworkers had deteriorated. While in that meeting, Gyulakian
reported to Liuzzi and Michael O'Connell, Lexus's
general sales manager, that, during her tenure in the finance
department, Ferreira sexually harassed her and cultivated a
sexually hostile or offensive work environment. Gyulakian
also reported the same conduct to human resources manager
Tammy Grady-Brown later that day. Prior to the day on which
her employment was terminated, Gyulakian had not reported the
harassment to Liuzzi or Grady-Brown. She had, however,
informed Tony Bruno, an assistant general sales manager and
Ferreira's supervisor, on multiple occasions about
various sexually offensive incidents over the course of the
previous eighteen months. After Gyulakian was terminated,
Lexus purportedly conducted an investigation, which uncovered
no corroboration of her allegations, and Ferreira was not
The sexual harassment policy.
relevant times, Lexus had a sexual harassment policy in
place, and held trainings for employees and supervisors on
that policy. The policy read: "Any employee
that feels that (s)he is a victim of sexual harassment should
immediately report such actions in accordance with the
following procedure. All complaints will be promptly and
thoroughly investigated." The reporting guidelines
instruct employees to "report the situation to either
[Liuzzi] . . . or [Grady-Brown]." The policy allows that
"[i]f an employee prefers not to discuss the matter with
these individuals, (s)he may go directly to any other member
of management." There is no definition in the policy
regarding who qualifies as "any other member of
The alleged discrimination.
jury heard evidence that Ferreira had, since Gyulakian became
a finance manager, habitually and graphically sexually
harassed her, and that she was working in an otherwise
sexually hostile or offensive work environment. By way of
example, Ferreira would often comment on Gyulakian's
"nipples, " "boobs, " and
"ass." Ferreira asked Gyulakian if they would one
day sleep together so he could actually see her breasts. At a
sexual harassment training, Ferreira commented to Gyulakian
about how harassment sounds like "her ass."
Gyulakian testified that the sexually charged comments would
come on an almost daily basis. The assaults were also
physical in nature, as Ferreira once violated Gyulakian's
personal "no touching" rule by touching her
buttocks, and, on other occasions, Ferreira would attempt to
throw coins down Gyulakian's blouse. At one point,
Gyulakian witnessed Ferreira, O'Connell, and Bruno
looking at naked photographs of Gyulakian's coworker on
the coworker's cellular telephone. On another occasion,
Robert Silvester, the former Lexus office manager, circulated
a memorandum regarding Ferreira's inappropriate behavior
after he heard Ferreira discussing anal intercourse in the
commenced this action against Lexus on January 10, 2013,
asserting four claims under G. L. c. 151B, § 4, for
harassment based on sex and national origin, on the grounds
that she was subjected to a hostile work environment because
of her (1) sex and (2) national origin; (3) retaliation and
unlawful threats for complaining of that hostile work
environment; and (4) termination on an impermissible basis.
At the close of Gyulakian's evidence, Lexus
unsuccessfully moved for a directed verdict. The motion did
not specifically challenge the imposition of punitive
damages. Over Lexus's objection, the special verdict slip
presented to the jury included a punitive damages question.
The jury returned a verdict in favor of Gyulakian on the
sexually hostile or offensive work environment claim,
awarding Gyulakian $40, 000 in compensatory damages and $500,
000 in punitive damages. The jury returned verdicts in favor
of Lexus on the remaining claims.
filed a motion for judgment n.o.v. or, in the alternative,
for a new trial or a remittitur, requesting, among other
things, that the judge set aside or decrease the awards of
compensatory and punitive damages. The motion for judgment
n.o.v. was allowed as to the award of punitive damages and
denied as to the compensatory damages. The judge concluded
that an employer "may not be vicariously liable for
punitive damages" under G. L. c. 151B based purely on
the actions of its supervisory personnel, and that the jury
were not provided with sufficient evidence of outrageous or
egregious behavior by Lexus.
appealed from the judge's decision to set aside the award
of punitive damages, and Lexus cross-appealed, arguing that
the evidence did not support a finding of any liability and
its motion for judgment n.o.v. should have been allowed as to
the award of compensatory damages.
Lexus's cross appeal.
argues that Gyulakian's evidence was insufficient to
warrant compensatory damages because it did not show that her
work performance suffered as a result of the harassment or
that the harassment altered the conditions of her employment.
Lexus also argues that the judge erred in failing to include
a question on the special verdict form asking whether the
plaintiff's suffering was caused by the harassment. We
are not persuaded by either contention.