Alarm One may appeal spanking verdict

Thursday, June 1, 2006

ANAHEIM, Calif.--Alarm One and three co-defendants were slapped with a $1.7 million judgment on April 29 for several counts, including sexual harassment and humiliation suffered by Janet Orlando, 53, a former alarm saleswoman who was spanked by supervisors.
Patrick Smith, chief operating officer, said Alarm One is considering appealing the case. He expected to make a decision in mid-May after press time.
Asked how a company absorbs the cost of a judgment like this, Patrick noted that "no payment would be required for 60 days," and that, if they decide to appeal, "there would be no payment until after that process."
The Fresno Bee reported that the spankings were done at sales meetings "with a competitor's yard sign as coworkers looked on and jeered." The intent, they said, was "in fun to build camaraderie among the sales force."
Sales team competitions took place at two remote offices, where winners "threw pies at losers, fed them baby food, made them wear diapers and spanked them with a competitor's yard sign." The practices ceased in 2004 when corporate officials learned of the behavior, the Fresno Bee reported.
The case was tried at Fresno County Superior Court. The jury awarded Orlando $500,000 for lost wages, future medical bills and emotional distress and $1.2 million in punitive damages.
Smith did not dispute that this behavior occurred, but he emphasized corporate officials were not aware of the behavior and they stopped it as soon as they found out.
"We do not condone this kind of behavior, physical touching, harassment or discrimination and we never have," he said.
Asked what lessons could be drawn from this case, Eric Pritchard, an attorney with Kleinbard Bell & Brecker of Philadelphia who specializes in the security industry, said this underscores the importance of "thorough and exhaustive employee retention and hiring practices ... and senior management knowing what is going on even in remote offices," as well as the need for companies to protect themselves against the risk of loss with insurance. He noted, however, that "sexual battery, which is an intentional tort, cannot be insured against."
Smith said that at the time of the incident Alarm One had 300 employees and several remote sales offices. It now has 50 employees: 40 at headquarters in Anaheim and 10 service technicians located in old sales offices. There is no longer any remote sales staff.