The Kentucky Court of Appeals upheld the $6.1 million jury award to strip-search victim Louise Ogborn, saying McDonald’s legal department was “fully aware” of hoax calls to its restaurants, yet its management made “a conscious decision not to train or warn employees or managers about the calls.”
In a unanimous decision, the court also said that the $5 million awarded to Ogborn in punitive damages for McDonald’s “reprehensible” behavior was justified because the evidence showed the company repeatedly “placed a higher value on corporate reputation than on the safety of its own employees” over the 10 years it knew about the hoax calls.
A three-judge panel also upheld the judgment for former assistant manager Summers, who claimed she was duped into executing the search because of the company’s failure to warn her about the hoaxes. But the court cut her $1 million punitive damage award to $400,000, saying the jury’s verdict was excessive. Summers was also awarded $100,000 in compensatory damages.
Ogborn, then 18, was methodically searched and forced to strip after a man pretending to be a police officer called the Mount Washington McDonald’s on April 9, 2004, and accused her of stealing a customer’s purse.
Following the caller’s instructions, Summers took away her clothes, cell phone and other belongings, and later called in her fiancé, Walter Nix, who, following orders from the caller, forced Ogborn to perform a series of humiliating tasks, conducted a cavity search of her body and ultimately sexually abused her.
Ogborn’s ordeal lasted for three hours, until a maintenance worker and other employees realized the caller was a fraud.
The court rejected eight grounds offered by McDonald’s for reversing the judgment, which included $1,111,312 in compensatory damages for Ogborn, who claimed she suffered psychological and emotional trauma.
Addressing McDonald’s claim that Ogborn’s damages should have been limited to worker’s compensation, the court said its lawyers failed to submit proof the company had worker’s comp insurance.
Even if they had, however, the court said Senior Judge Tom McDonald had properly ruled that the hoax occurred outside of Ogborn’s course of employment because she had “clocked out” before it occurred.
The court said that Summers, who was an employee, compelled Ogborn to disrobe in a small office, deprived her of her clothes, and allowed four McDonald’s employees to see in her a “state of undress,” all of which “qualify as sexual harassment.”
The court rejected McDonald’s denial that Ogborn was unlawfully imprisoned, saying the evidence showed she had no choice but to stay once her clothes were taken. The company had claimed she voluntarily consented to be searched so she could clear her name.
Finally the court dismissed the company’s argument that it couldn’t be held liable for the unforeseeable criminal acts of Nix, who was later convicted of sexual abuse and other crimes and sentenced to five years in prison.
Writing for the court, Judge Glenn Acree said McDonald’s knew that some of the prior hoaxes at its restaurants had produced “criminal activity” and that Nix’s crimes were a “foreseeable danger naturally resulting” from the company’s failure to warn and train employees and owners about an “ongoing problem.”
The court said Summers had suffered from humiliation and emotional trauma during the hoax, but said it was trimming the punitive damage award for Summers in part because she experienced no “violence, imprisonment and assault.”
Summers, who was criminally charged after the hoax, entered an Alford plea to misdemeanor unlawful imprisonment, meaning she asserted her innocence while acknowledging there was enough evidence to convict her. She was given probation.
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