A $37 million lawsuit against Australian department store David Jones (ASX: DJS) by an employee is casting a shadow over the retailer’s unveiling of its spring-summer fashion line.
Kristy Fraser-Kirk, a 26-year-old publicity coordinator, is requesting punitive damages for sexual harassment. She is seeking 5 percent of the $700 million in profits that David Jones earned between 2003 and 2010 during Mark McInnes’s tenure as chief executive, along with an additional $2 million from Mr. McInnes, which constitutes 5 percent of his salary.
The claim filed in the Federal Court in Sydney yesterday took David Jones by surprise, particularly regarding the amount. It is believed that discussions with the complainant’s lawyers had been ongoing until recently.
Yesterday, Ms. Fraser-Kirk mentioned that she had endeavored to resolve the issue equitably.
In spite of this legal action, the Australian retailer, which reported an unprecedented profit of $156.5 million in 2008-09, announced yesterday that it anticipates profits will rise by 5 to 10 percent for 2009-10. It also projects an additional 5 to 10 percent increase for 2010-11, “based on all the information available to it.”
David Jones did not comment on the results of a recent independent evaluation of its code of ethics and conduct, nor the possible changes that may follow.
The statement of claim alleges that four additional employees experienced serious sexual misconduct by Mr. McInnes, three of whom were known to the company.
David Jones announced its intention to vigorously contest the lawsuit.
