Title: Gyulakian v. Lexus of Watertown, Inc.
Citation: N/A
Docket Number: SJC-11959
State: Massachusetts
Issuer: Massachusetts Supreme Court
Date: August 24, 2016

NOTICE:  All slip opinions and orders are subject to formal 
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SJC-11959 
 
EMMA GYULAKIAN  vs.  LEXUS OF WATERTOWN, INC., & another.1 
 
 
 
Middlesex.     March 10, 2016. - August 24, 2016. 
 
Present:  Gants, C.J., Spina, Cordy, Botsford, Duffly, & Lenk, 
JJ.2 
 
 
Employment, Sexual harassment.  Anti-Discrimination Law, Sex, 
Attorney's fees.  Practice, Civil, Judgment notwithstanding 
verdict.  Damages, Punitive. 
 
 
 
 
Civil 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. 
 
 
The Supreme Judicial Court granted an application for 
direct appellate review. 
 
 
 
Robert S. Mantell (Lori A. Jodoin with him) for the 
plaintiff. 
 
Christopher J. Sullivan (Tory A. Weigand with him) for the 
defendants. 
                                                          
 
 
1 Post Motors, Inc., doing business as Lexus of Watertown. 
 
 
2 Justice Cordy participated in the deliberation on this 
case and authored this opinion prior to his retirement.  
Justices Spina and Duffly participated in the deliberation on 
this case prior to their retirements. 
2 
 
 
The following submitted briefs for amici curiae: 
 
Rebecca Pontikes, Katherine Skubecz, Michaela C. May, & 
Chetan Tiwari for Massachusetts Employment Lawyers Association & 
others. 
 
Afton M. Templin for Women's Bar Association of 
Massachusetts. 
 
Ben Robbins & Martin J. Newhouse for New England Legal 
Foundation & another. 
 
Elizabeth S. Dillon for Massachusetts Defense Lawyers 
Association. 
 
 
 
CORDY, J.  In 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).3  
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. 
 
Lexus filed a motion for judgment notwithstanding the 
verdict (judgment n.o.v.), or, in the alternative, for a new 
                                                          
 
 
3 The jury returned verdicts in favor of the defendants, 
Lexus of Watertown, Inc., and Post Motors, Inc. (collectively, 
Lexus), on claims of retaliation and unlawful threat.  Those 
verdicts are not at issue in this appeal. 
3 
 
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 punitive damages. 
 
Gyulakian 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 remittitur.4 
                                                          
 
 
4 We acknowledge the amicus briefs submitted by the 
Massachusetts Defense Lawyers Association; the New England Legal 
Foundation and Associated Industries of Massachusetts; the 
Massachusetts Employment Lawyers Association, the American Civil 
Liberties Union of Massachusetts, GLBTQ Legal Advocates & 
Defenders, the Jewish Alliance for Law and Social Action, and 
the Lawyers' Committee for Civil Rights and Economic Justice; 
and the Women's Bar Association of Massachusetts. 
4 
 
 
1.  Factual and procedural background.  The jury could have 
found the following.5,6 
 
a.  Gyulakian's employment.  Gyulakian 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 fire her. 
 
Despite 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 
                                                          
 
 
5 Some factual details are reserved for later discussion. 
 
 
6 Because we are reviewing the grant of a motion for 
judgment notwithstanding the verdict (judgment n.o.v.), we 
summarize the evidence in the light most favorable to the 
plaintiff, Emma Gyulakian, disregarding evidence favorable to 
Lexus.  See Esler v. Sylvia-Reardon, 473 Mass. 775, 777 (2016). 
5 
 
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.7  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 disciplined. 
 
b.  The sexual harassment policy.  At all relevant times, 
Lexus had a sexual harassment policy in place, and held 
trainings for employees and supervisors on that policy.8  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 
                                                          
 
 
7 Gyulakian testified that, prior to termination of her 
employment, she had not informed Liuzzi of Ferreira's harassment 
because she believed that he enjoyed Ferreira's off-color jokes 
and had even participated in sexually harassing her.  For 
instance, Gyulakian testified that Liuzzi forwarded her an 
advertisement for a "goat stand" for "milking," which Gyulakian 
interpreted as a comment about her breasts. 
 
 
8 Gyulakian signed the sexual harassment policy to 
acknowledge that she had read it. 
6 
 
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 management." 
 
c.  The alleged discrimination.  The 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, 
7 
 
circulated a memorandum regarding Ferreira's inappropriate 
behavior after he heard Ferreira discussing anal intercourse in 
the office. 
 
d.  Procedural background.  Gyulakian 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 origin9; (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.10 
 
Lexus filed a motion for judgment n.o.v. or, in the 
alternative, for a new trial or a remittitur, requesting, among 
                                                          
 
 
9 Gyulakian dropped the hostile work environment claim based 
on national origin prior to trial. 
 
 
10 Gyulakian did not appeal the jury's verdicts on the 
retaliation and unlawful termination claims. 
8 
 
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. 
 
Gyulakian 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. 
 
2.  Discussion.11  a.  Lexus's cross appeal.  Lexus argues 
that Gyulakian's evidence was insufficient to warrant 
                                                          
 
 
11 Our review of the allowance or denial of a motion for 
judgment n.o.v. pursuant to Mass. R. Civ. P. 50 (b), as amended, 
428 Mass. 1402 (1998), considers "whether anywhere in the 
evidence, from whatever source derived, any combination of 
circumstances could be found from which a reasonable inference 
could be drawn in favor of the nonmoving party."  Esler, 473 
Mass. at 780, quoting Phelan v. May Dep't Stores Co., 443 Mass. 
52, 55 (2004).  See Haddad v. Wal-Mart Stores, Inc. (No. 1), 455 
Mass. 91, 94 n.5 (2009).  That "evidence is reviewed in the 
light most favorable to the plaintiff, 'without weighing the 
credibility of the witnesses or otherwise considering the weight 
of the evidence,'"  Id., quoting Bavuso v. Caterpillar Indus., 
Inc., 408 Mass. 694, 695 n.1 (1990), and we disregard the 
evidence favorable to the defendant.  See Esler, supra at 777.  
9 
 
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. 
 
i.  Sufficiency of the evidence.  It is unlawful "[f]or an 
employer, personally or through its agents, to sexually harass 
any employee."  G. L. c. 151B, § 4 (16A).  Sexual harassment is 
defined as "sexual advances, requests for sexual favors, and 
other verbal or physical conduct of a sexual nature when . . . 
such advances, requests or conduct have the purpose or effect of 
unreasonably interfering with an individual's work performance 
by creating an intimidating, hostile, humiliating or sexually 
offensive work environment."  G. L. c. 151B, § 1 (18), as 
amended through St. 1987, c. 473, § 2.  Chapter 151B, § 4 (1), 
"applies not only to hiring, firing, and compensation, but also 
to the 'terms, conditions or privileges of employment.'"  
College-Town, Div. of Interco, Inc. v. Massachusetts Comm'n 
Against Discrimination, 400 Mass. 156, 162 (1987) (College-
                                                                                                                                                                                           
"We do not defer to the judge's view of the evidence but examine 
the case anew, following the same standard the judge is obliged 
to apply."  MacCormack v. Boston Edison Co., 423 Mass. 652, 659 
(1996). 
10 
 
Town).  Compensatory damages incurred based on the actions of 
supervisory personnel who create a sexually hostile or offensive 
work environment can be imputed to the employer.  See id. at 
165-166. 
 
To prevail on a claim of sexual harassment based on the 
creation of a sexually hostile or offensive work environment, 
the plaintiff bears the burden of establishing that the conduct 
alleged was both "subjectively offensive" and "sufficiently 
severe and pervasive to interfere with a reasonable person's 
work performance."  Dahms v. Cognex Corp., 455 Mass. 190, 205 
(2009), quoting Muzzy v. Cahillane Motors, Inc., 434 Mass. 409, 
411, 412 n.2 (2001).  See College-Town, 400 Mass. at 162.  A 
sexually hostile or offensive work environment is one that is 
"pervaded by harassment or abuse," resulting in "intimidation, 
humiliation, and stigmatization" that poses a "'formidable 
barrier' to the plaintiff's full participation in the workplace" 
(citation omitted).  Pelletier v. Somerset, 458 Mass. 504, 523-
524 (2010). 
 
Considering the evidence in the light most favorable to the 
plaintiff, the record is rife with evidence from which the jury 
could have concluded that the behavior to which Gyulakian was 
subjected was both objectively and subjectively offensive.  
Ferreira's unwanted sexual attention came on a daily basis and 
to such a degree that during her tenure under Ferreira, 
11 
 
Gyulakian was forced to implement a "no-touching" rule in order 
to keep her supervisor at bay.  From this evidence, the jury 
could infer that Ferreira's conduct, over a period of eighteen 
months, "was sufficiently pervasive to alter the conditions of 
[Gyulakian's] employment, and thus created a sexually harassing 
working environment."  College-Town, 400 Mass. at 162.  In any 
event, the evidence was sufficient to support a finding that the 
discrimination to which she was subjected caused her to suffer 
emotional distress, interfered with her work performance, and 
would have interfered with a reasonable person's work 
performance, thus resulting in a "formidable barrier" to her 
full participation in the workplace.  See Esler v. Sylvia-
Reardon, 473 Mass. 775, 780 (2016), quoting Phelan v. May Dep't 
Stores Co., 443 Mass. 52, 55 (2004); Pelletier, 458 Mass. at 
523-524; Haddad v. Wal-Mart Stores, Inc. (No. 1), 455 Mass. 91, 
93 n.3 (2009); Stonehill College v. Massachusetts Comm'n Against 
Discrimination, 441 Mass. 549, 570-571, cert. denied sub nom. 
Wilfert Bros. Realty Co. v. Massachusetts Comm'n Against 
Discrimination, 543 Mass. 979 (2004). 
 
ii.  Jury instructions.  Lexus asserts that the trial judge 
committed material error in not including a separate special 
question on the special verdict form regarding whether Gyulakian 
12 
 
sufficiently proved that her suffering was caused by Ferreira's 
harassment.12 
 
The jury were properly charged as to the law.  The judge 
instructed the jury that no damages could be awarded for 
injuries not "conducted by one of the employer[']s supervisors."  
The special verdict form also asked the following questions:  
(1) "Do you find that Ms. Gyulakian was subjected to an unlawful 
hostile work environment?" and (2) "What amount of damages, if 
any, do you find were caused by the unlawful hostile work 
environment?"  The jurors checked the box indicating "Yes" as to 
the first question, and determined that the hostile work 
environment caused $40,000 worth of damages.  The implication of 
the trial judge's instruction, supplemented by the questions on 
the special verdict form, is that Lexus could not be liable for 
damages but for its supervisor causing the sexually hostile or 
offensive work environment.  The trial judge did not err in 
denying the defendant's motion for judgment n.o.v. as to the 
jury's award of compensatory damages. 
 
b.  Scope of punitive damages.  This case puts at issue the 
scope of an employer's liability for punitive damages when its 
employee creates a sexually hostile or offensive work 
                                                          
 
 
12 Before the jury were charged, the defendant proposed a 
special jury question that would have asked whether "sexual 
harassment of the plaintiff [was] a substantial legal cause of 
the plaintiff's injury."  The judge denied the proposed 
question. 
13 
 
environment.13  Gyulakian argues that punitive damages are 
warranted against Lexus on two grounds:  first, that Lexus 
should be punishable based on the actions of its supervisory 
                                                          
 
 
13 The punitive damages jury instruction given by the trial 
judge was in accord with our decision in Haddad, 455 Mass. at 
110-111.  The instruction was distributed to the jury, and read: 
 
 
"If you find that the defendant has intentionally 
discriminated against the plaintiff, you may consider 
whether punitive damages are warranted.  To sustain an 
award of punitive damages, a finding of intentional 
discrimination alone is not sufficient.  An award of 
punitive damages requires a heightened finding beyond 
mere liability and also beyond a knowing violation of 
the statute.  Punitive damages are warranted where the 
conduct is so offensive that it justifies punishment 
and not merely compensation.  Unlike compensatory 
damages, which compensate the plaintiff for the harm 
she has suffered, the purpose of punitive damages is 
to punish the defendant for conduct that is outrageous 
or egregious because of the defendant's evil motive or 
reckless indifference to the rights of others.  
Punitive damages are appropriate where the defendant's 
misconduct is extraordinary and warrants condemnation 
and deterrence. 
 
 
"In making an award of punitive damages you 
should consider: 
 
"(1) The character and nature of the Defendant's 
conduct; 
 
"(2) The amount of money needed to deter any future 
acts of discrimination; 
 
"(3) The actual harm suffered by the Plaintiff; and 
 
"(4) The magnitude of any potential harm to other 
victims if similar future behavior is not deterred. 
 
 
"If you do award punitive damages, you should fix 
the amount by using calm discretion and sound reason 
and make sure that such damages are not overlapping." 
14 
 
personnel, regardless of whether Lexus was aware of that 
conduct; and, second, that, after being notified of the 
harassment, Lexus's failure to take sufficient steps to remedy 
the discrimination should be punishable. 
 
As to Gyulakian's first proposed source of punitive 
damages, we are not persuaded that a supervisor's creation of a 
sexually hostile or offensive work environment alone is 
sufficient to warrant the imposition of punitive damages on the 
employer.  Punitive damages are intended to fulfil a 
prophylactic purpose, and serve little benefit when imposed on 
an employer for the actions of a supervisory employee where that 
supervisor's discriminatory transgressions were unknown to the 
employer.  See Haddad, 455 Mass. at 110-111 (punitive damages 
only imposed for knowing violations and "outrageous or 
egregious" conduct); Pine v. Rust, 404 Mass. 411, 415 (1989) 
("Punitive damages are not favored in Massachusetts . . ."); 
Restatement (Second) of Agency § 217C (1958).  In determining 
whether to impose punitive damages against an employer based on 
its supervisory employee's creation of a sexually hostile or 
offensive work environment, the scope of our inquiry is 
independent of the direct actions of that employee, and 
considers whether the employer's response, once it is on notice 
of the offensive behavior, was sufficient to address the 
complained-of harassment. 
15 
 
 
Whether a plaintiff is entitled to punitive damages from 
his or her employer on the basis of being exposed to a sexually 
hostile or offensive work environment created by one of its 
employees is therefore a two-step inquiry.  We consider first 
whether the employer was on notice of the harassment and failed 
to take steps to investigate and remedy the situation; and, 
second, whether that failure was outrageous or egregious.  See 
Haddad, 455 Mass. at 110.14,15 
 
i.  Waiver.  Before we reach the issue whether Lexus is 
liable for punitive damages, we must consider if Lexus waived 
the opportunity to challenge the imposition of punitive damages 
when it did not specifically move for a directed verdict on the 
issue.  The trial judge concluded that the issue was not waived 
because Lexus raised the propriety of imposing punitive damages 
                                                          
 
 
14 While the punitive damages instructions fashioned from 
Haddad, see note 13, supra, are fundamentally correct, in 
circumstances where punitive damages are sought against an 
employer arising out of the sexually offensive behavior of an 
employee (even one with some supervisory responsibility), the 
instructions should clarify that it is the actions of the 
employer, not the actions of that employee, that are the 
appropriate focus, and that it is the employer's conduct that 
must be found to be outrageous or egregious, thereby justifying 
punishment and not mere compensation. 
 
 
15 The trial judge and parties label these two sources of 
potential punitive damages liability as "vicarious" and 
"direct," respectively.  We note that all liability against 
entities for the creation of sexually hostile or offensive work 
environments is imputed, or "vicarious." 
16 
 
on an imputed basis under G. L. c. 151B while challenging the 
availability of such damages on the special verdict form. 
 
Motions for judgment n.o.v. are governed by Mass. R. Civ. 
P. 50 (b), as amended, 428 Mass. 1402 (1998).  They are allowed 
"only when a motion for directed verdict has been made at the 
close of evidence."  Bonofiglio v. Commercial Union Ins. Co., 
411 Mass. 31, 34 (1991). A motion for a directed verdict must 
"state the specific grounds therefor."  Mass. R. Civ. P. 50 (a), 
365 Mass. 814 (1974).  Because a motion for judgment n.o.v. is 
"technically a revised motion for a directed verdict, no grounds 
for the motion for judgment [n.o.v.] may be raised which were 
not asserted in the directed verdict motion."  Bonofiglio, 
supra.  This requirement "is an important one," as it "allows 
the judge knowingly to rule on the question before him [or her], 
and it allows the opposing party an opportunity to rectify any 
deficiencies in its case -- or, more precisely, an opportunity 
to seek leave from the court to do so."  Id. at 34-35. 
 
 The trial judge's disposition as to the waiver issue was 
appropriate.  Lexus's motion for a directed verdict, which 
challenged the sufficiency of the evidence as to a finding of 
liability, encompassed the potential for punitive damages, as 
they were subsumed in the G. L. c. 151B claims, and any chance 
for the return of punitive damages would have been nullified had 
the trial judge granted the motion.  See Bain v. Springfield, 
17 
 
424 Mass. 758, 761-762 (1997) (defendant's motion for directed 
verdict on ground that evidence was insufficient for liability 
preserved issue, raised for first time on appeal, that punitive 
damages were excessive).  This is particularly the case where 
Lexus lodged a timely objection regarding punitive damages to 
the proposed special verdict form, and it therefore successfully 
preserved the issue for appeal. 
 
ii.  Lexus failed to take adequate remedial measures after 
learning of Ferreira's sexually harassing conduct.  Where the 
employer is aware of a sexually hostile or offensive work 
environment, the potential for punitive damages against the 
enterprise is triggered and an inquiry into the response by the 
employer is warranted.  See Trinh v. Gentile Communications, 
LLC, 71 Mass. App. Ct. 368, 376-377 (2008).  The first step in 
our analysis therefore is to consider whether Lexus was notified 
of -- and failed to remedy -- the sexually hostile or offensive 
work environment to which Gyulakian was subjected.  Gyulakian 
maintains that (1) she made complaints to management personnel 
during her tenure at Lexus, (2) Lexus failed to respond 
adequately to her complaints, and (3) Lexus's purported 
investigation was a sham. 
 
A.  Lexus was on notice of Ferreira's behavior.  There is 
no bright line rule delineating who must be notified before an 
employer has been put on notice of harassment in the workplace.  
18 
 
Suffice it to say, if an employee complains to the officials 
identified in the employer's sexual harassment policy,16 the 
employer would be put on sufficient notice to trigger an 
obligation to investigate and take remedial action if the 
complaint proves to be well founded.  The failure to do so opens 
the door to the potential imposition of punitive damages if the 
jury conclude that the employer's failure was sufficiently 
outrageous and egregious.  Of course, an employer can become 
aware of sexually harassing conduct engaged in by its employees 
by means other than a complaint made in accord with the 
employer's sexual harassment policy.  Here, the evidence was 
sufficient to support a jury finding that Lexus was on notice of 
the sexually harassing conduct of its employee (Ferreira), well 
before Gyulakian was terminated. 
 
Testimony at trial tended to show that members of senior 
management were aware of the sexually hostile or offensive work 
environment at the organization.  By way of example, O'Connell 
(the Lexus general sales manager) witnessed Ferreira attempt to 
throw coins down Gyulakian's blouse; Gyulakian testified that 
she complained on several occasions to Bruno (the assistant 
                                                          
 
 
16 General Laws c. 151B, § 3A, requires that employers 
establish a sexual harassment policy, including a list of 
"persons to whom complaints should be made." 
19 
 
general sales manager) concerning Ferreira's conduct;17 and 
Silvester, the former Lexus office manager, heard Ferreira 
discussing anal sex in the office.18  Lexus was again put on 
notice of the harassment on the day Gyulakian's employment was 
terminated when she directly informed Liuzzi, O'Connell, and 
Grady-Brown of Ferreira's conduct. 
 
B.  Lexus failed to adequately remedy the discrimination.  
Because Lexus had been notified in at least two ways of the 
sexual harassment in its workplace, we consider its remedial 
efforts after those notifications.  First and foremost, where a 
conduit for sexual harassment notifications, as delineated in 
the employer's sexual harassment policy, fails to appropriately 
report or in any way investigate a sexual harassment complaint, 
                                                          
 
 
17 While there appears to be conflicting testimony regarding 
whether the sexual harassment policy requires direct reporting 
to the general manager or HR manager, the plain language of the 
policy, corroborated by the HR manager at the time, Grady-Brown, 
confirmed that it was acceptable to report harassment to any 
member of management.  The jury could have concluded that Bruno, 
the assistant general sales manager and Ferreira's direct 
supervisor, was an appropriate conduit for such complaints.  
Whether notice by means of a complaint communicated in accord 
with the employer's sexual harassment policy is necessary when 
the alleged harasser is a member of senior management at the 
company, and in such capacity may virtually stand in its shoes, 
is not a question we need reach in this case. 
 
 
18 After hearing this conversation, Silvester told Ferreira 
that he believed that such conduct was inappropriate, drafted a 
memorandum to that effect, and circulated it to his direct 
supervisor, Joe Tieuli, the office comptroller.  When O'Connell 
and Liuzzi read Silvester's memorandum, they laughed and ignored 
it.  Ferreira was never punished. 
20 
 
that lack of response is per se evidence of a failure to 
adequately remedy the purported discrimination.  Here, because 
there was evidence presented that Bruno failed to make any 
remedial efforts after hearing reports that his supervisee was 
creating a sexually hostile or offensive work environment, the 
jury were entitled to conclude that Lexus did not adhere to its 
own sexual harassment policy and failed to take any action to 
remedy the discrimination.19 
 
Second, the failure to remedy alleged discrimination also 
can arise where the employer purports to investigate the 
discrimination, but does so in an inadequate manner.  Here, once 
Liuzzi and Grady-Brown sought to look into Gyulakian's 
complaint, the jury could have found their investigation to be 
wholly insufficient.  Liuzzi testified that, on learning of 
Ferreira's sexual harassment during the meeting at which 
Gyulakian reported Ferreira's conduct to him, he "honestly 
didn't believe [Gyulakian]."  Liuzzi told Gyulakian that there 
might be a job opportunity at Toyota of Watertown (Toyota), a 
sister company to Lexus, but then warned her that reporting the 
sexual harassment to Grady-Brown (which she ultimately did) 
might jeopardize that opportunity.  Despite his reservations, 
given his role in the company, Liuzzi was responsible for 
                                                          
 
 
19 Bruno denied receiving such complaints.  The jury, having 
observed the witnesses, were entitled to credit Gyulakian's 
testimony. 
21 
 
conducting an adequate and impartial investigation into 
Gyulakian's claims. 
 
With respect to that investigation, Liuzzi testified that 
he interviewed Ferreira, O'Connell, Bruno, and Joe Tieuli, the 
Lexus comptroller.  Liuzzi did not interview anyone besides 
Ferreira in the finance department because he did not want to 
undermine Ferreira.  Liuzzi further testified that after Tieuli, 
who had worked with Ferreira for twenty years, told him that 
there had never been another allegation against Ferreira, Liuzzi 
concluded his investigation.  When Tieuli testified during the 
trial, however, he denied that he had been questioned with 
regard to Gyulakian's allegations.20  Grady-Brown also testified 
during trial that she conducted her own investigation into 
Gyulakian's complaints, but the jury saw no notes from any of 
her or Liuzzi's investigative interviews. 
 
Three cases, Haddad, 455 Mass. at 106-109; College-Town, 
400 Mass. at 167-168; and Trinh, 71 Mass. App. Ct. at 377-378, 
inform our inquiry into whether the investigation was adequate.  
In Haddad, supra at 108, a case regarding gender discrimination, 
we concluded that the defendant-employer's purported 
investigation was a "sham," in that no male employees were 
                                                          
 
 
20 A response to Gyulakian's pretrial interrogatory asking 
for a description of Lexus's investigation of Gyulakian's sexual 
harassment report was read to the jury, and it included that 
during his investigation, Liuzzi only interviewed Ferreira, 
Bruno, O'Connell, and Silvester. 
22 
 
investigated or disciplined for infractions similar to those for 
which the plaintiff's employment was terminated.  We likewise 
concluded that the defendant-employer in College-Town, supra, 
was liable for a failure to investigate because "[the plaintiff] 
was never informed about the staff meeting [at which the 
investigation took place], while [the alleged harasser] was 
present throughout.  The staff were never questioned 
individually.  [The plaintiff] was never provided an opportunity 
to confront [the alleged harasser], nor was she interviewed 
after [the alleged harasser] and the staff had been approached."  
Finally, in contrast, the Appeals Court reasoned in Trinh, supra 
at 377-378, that punitive damages were not appropriate because 
the defendant-employer's investigators interviewed all the 
relevant personnel, took interview notes that reflected the 
questions asked of their interview subjects, and gave the 
plaintiff an opportunity to participate in the investigation. 
 
In sum, based on our review of the trial record, we are 
persuaded that there was sufficient evidence on which the jury 
could find that members of Lexus management failed to conduct an 
adequate investigation after being made aware of Ferreira's 
reported harassment.  There were several apparent discrepancies 
and shortcomings in the alleged investigation:  no members of 
the finance department, who would have been most likely to 
witness the alleged conduct, were interviewed, purportedly 
23 
 
because Liuzzi did not want to undermine Ferreira, see College-
Town, 400 Mass. at 167-168; Gyulakian was never contacted during 
the course of the investigation, see id.; and the investigation 
was marred from the beginning, as it was carried out by a member 
of management who admitted to carrying a bias against the 
plaintiff.  See Haddad, 455 Mass. at 106-109.  It is 
particularly concerning that the purported investigation 
uncovered no corroboration of Gyulakian's allegations regarding 
the sexualized workplace even though a former office manager had 
previously circulated a memorandum regarding Ferreira's 
inappropriate behavior.  It is also noteworthy that many of 
Gyulakian's allegations were corroborated at trial by members of 
the Lexus staff, none of whom was contacted as part of Lexus's 
internal investigation.21  See College-Town, supra. 
                                                          
 
 
21 Taylor Benson, a former title clerk at Lexus, testified 
that Ferreira made a comment regarding anal sex (which she 
reported to Silvester), that she witnessed Ferreira threatening 
to violate Gyulakian's "no touching" rule on several occasions, 
and that Ferreira personally made an inappropriate comment to 
her regarding her shirt.  Ferreira told Benson that Gyulakian 
wore "stripper shoes."  Benson was not interviewed as part of 
the investigation.  Scott Polivy, a former salesperson at Lexus, 
confirmed that Ferreira had commented on Gyulakian's breasts at 
the office.  Polivy was not interviewed as part of the 
investigation.  Adam Skolnick, the former general sales manager 
who supervised Ferreira, heard him making comments about female 
coworkers' breasts and buttocks that would not have been 
acceptable at "church or temple."  Skolnick was not interviewed 
as part of the investigation.  Michael Berube, a former sales 
consultant, testified regarding Ferreira's daily "vulgar 
profanity" relating to women, including their female coworkers. 
24 
 
 
In any event, given that the breadth of Lexus's 
investigation was a disputed issue at trial, the jury could have 
found that any such investigation was abbreviated and colored by 
Liuzzi's belief that Gyulakian's claims were false.  See Esler, 
473 Mass. at 780, quoting Phelan, 443 Mass. at 55; Haddad, supra 
at 94 n.5. 
 
iii.  Lexus's failure to take adequate remedial measures 
after being notified of Ferreira's conduct warranted the 
imposition of punitive damages.  Where the employer's failure to 
remedy the discriminatory conduct is "outrageous or egregious," 
Haddad, 455 Mass. at 110, punitive damages may be imposed.22  In 
Haddad, we fashioned a list of factors appropriate in 
determining whether punitive damages are appropriate.  Id. at 
111.  We look to (1) "whether there was a conscious or 
purposeful effort to demean or diminish the class of which the 
plaintiff is a part (or the plaintiff because he or she is a 
member of the class)"; (2) "whether the defendant was aware that 
the discriminatory conduct would likely cause serious harm, or 
                                                          
 
 
22 Our punitive damages analysis requires a "knowing 
violation of the statute."  Haddad, 455 Mass. at 110.  Where 
employers are required by statute to adopt a policy against 
sexual harassment, G. L. c. 151B, § 3A, we are satisfied that an 
employer that is aware of workplace harassment and fails to 
remedy that harassment has committed a "knowing violation of the 
statute."  Haddad, supra at 108, 110 (evidence that employer has 
policy prohibiting harassment sufficient for showing that it was 
aware that gender discrimination was not legally permitted).  
Our analysis is therefore limited to whether that failure was 
"outrageous or egregious."  Id. at 110. 
25 
 
recklessly disregarded the likelihood that serious harm would 
arise"; (3) "the actual harm to the plaintiff"; (4) "the 
defendant's conduct after learning that the initial conduct 
would likely cause harm"; and (5) "the duration of the wrongful 
conduct and any concealment of that conduct by the defendant."  
Id. 
 
In considering whether Lexus's failure to remedy the 
discrimination warrants the imposition of punitive damages, we 
again examine its conduct at both of the junctures at which we 
determined it was on notice of Ferreira's conduct.  The analysis 
therefore takes into account the fact that Lexus both failed to 
comply with its own sexual harassment policy and also failed to 
make an adequate inquiry once an investigation began. 
 
Lexus was aware, through Bruno, that Gyulakian had made 
multiple complaints regarding Ferreira.  It was also aware, as 
evidenced by its sexual harassment policy, that sexual 
harassment in the workplace is unlawful.  Therefore, when Bruno 
failed to proceed with any investigation, as was required by the 
sexual harassment policy, this failure was made with Lexus's 
knowledge that such conduct would cause continued discriminatory 
harm.  Haddad, 455 Mass. at 111 (second factor).  The fourth and 
fifth Haddad factors, both concerning the defendant's conduct 
after learning of the discrimination, also strongly weigh in 
26 
 
favor of Gyulakian, given that the jury were entitled to find 
that Lexus's investigation was woefully insufficient.  See id. 
 
Based on the foregoing, we conclude that the jury were 
warranted in finding that, independent of Ferreira's harassing 
conduct, Lexus acted intentionally or with reckless disregard 
for Gyulakian's rights under the discrimination laws, and that 
its actions were outrageous or egregious.  See id.  The trial 
judge's allowance of Lexus's motion for judgment n.o.v. as to 
the award of punitive damages is therefore reversed, and the 
jury award is reinstated.  However, because the trial judge did 
not consider Lexus's motion for remittitur as to those punitive 
damages, instead opting to vacate them entirely, the case is 
remanded for consideration of that issue.23 
 
c.  Attorney's fees.  The trial judge allowed Gyulakian's 
motion for attorney's fees but, after also granting Lexus's 
motion for judgment n.o.v. as to the punitive damages award, 
concluded that "[t]he vacated award of punitive damages 
represented a significant portion of the plaintiff's award."  
She therefore reduced the award of attorney's fees by twenty-
five per cent.  Having reinstated the punitive damages award, we 
also conclude that the judge's reduction in the plaintiff's 
                                                          
 
 
23 The motion for remittitur is only remanded to consider 
the award of punitive damages, not compensatory damages. 
27 
 
attorney's fees is inappropriate, and remand the case to the 
Superior Court for a calculation of the amount to be paid.24 
 
3.  Conclusion.  The judge's order granting judgment n.o.v. 
as to the punitive damages award is reversed, the jury's verdict 
is reinstated, and the case is remanded for calculation of 
Gyulakian's attorney's fees and consideration of Lexus's motion 
for remittitur as to the award of punitive damages.25  In all 
other respects, judgment for the plaintiff is affirmed. 
 
 
 
 
 
 
 
So ordered. 
                                                          
 
 
24 A prevailing party on a G. L. c. 151B claim is entitled, 
"irrespective of the amount in controversy," to reasonable 
attorney's fees and costs, "unless special circumstances would 
render such an award unjust."  G. L. c. 151B, § 9.  The amount 
of attorney's fees "is largely discretionary with the judge, who 
is in the best position to determine . . . the fair value of the 
attorney's services."  Fontaine v. Ebtec Corp., 415 Mass. 309, 
324 (1993). 
 
 
25 Gyulakian asserts that postjudgment interest should be 
calculated from the date of the verdict (December 19, 2014) 
rather than from the date judgment was entered (March 31, 2015).  
See Mass. R. Civ. P. 58 (a), as amended, 371 Mass 908 (1977) 
("clerk . . . shall forthwith prepare, sign and enter judgment 
without awaiting any direction by the court"; "[e]ntry of the 
judgment shall not be delayed for the taxing of costs"); 
Fontaine, 415 Mass. at 328 ("plaintiff is entitled to 
postjudgment interest on the liquidated damages award . . . from 
. . . the date of the jury's verdict").  "The court, however, 
retains power to order otherwise where, for example, the court 
has before it a motion for judgment n.o.v. (Rule 50 [b]) and 
directs that the clerk not enter judgment . . . immediately."  
1973 Reporters' Notes to Rule 58, Mass. Ann. Laws Court Rules, 
Rules of Civil Procedure, at 1108 (LexisNexis 2015).  Here, the 
judge did not rule on the defendant's motion for judgment n.o.v. 
until March 24, 2015, and judgment on the jury's verdict was not 
entered until March 31, 2015.  We leave the disposition of the 
interest matter to the trial court, to be determined as part of 
the defendant's motion for remittitur.