In a published decision issued on November 20, 2009, the Kentucky Court of Appeals has upheld the Bullitt Circuit Court’s award of over $6 Million to two former employees of the Mt. Washington McDonald’s.  In its decision in McDonald’s Corporation v Ogborn, the court considered a truly bizarre situation.

   Between 1994 and 2004, an unknown hoaxer called fast food restaurants across the county, pretending to be a police officer.  He convinced restaurant managers, employees, and outsiders to conduct strip searches and even sexual assaults upon victims the hoaxer had apparently pre-selected.  The hoax was carried out more than 30 times at different McDonald’s restaurants, including several in Kentucky.  According to the court’s opinion, McDonald’s legal department was aware of and had documented these facts, but the company nevertheless failed to warn or train its employees about this hoax, or to prepare them to respond appropriately so as to prevent the hoax from being repeated.

             In April 2004, eighteen-year-old Louise Ogborn had just finished her shift at the Mt. Washington McDonald’s when the assistant manager, Donna Summers, got a call from an unknown person claiming to be a police officer.  This caller said that a purse or wallet had been stolen from the restaurant, and that the suspect was a person fitting Ogborn’s description.  He instructed Summers to detain Ogborn, take her personal possessions, and question her.  Summers complied, and at the caller’s direction, convinced Ogborn to disrobe.   Summers further obeyed the callers’ directive to bring a male “investigator” into the situation, but when the cook she attempted to involve refused in no uncertain terms (“in appropriately strong colloquial language,” according to the court), Summers acquiesced to the callers’ directive that she summon her fiancé to complete the investigation.  The fiancé, Nix, eventually strip searched and then sexually assaulted Ogborn, who said she all the while maintained her innocence and asked to leave. It was only when assistant manager Summers turned the investigation over to the restaurant’s maintenance staff that Ogborn was released.  The maintenance workers did not believe the caller was a police officer and terminated the call.  Ogborn was released and given back her clothes and cell phone.  Thereafter, McDonald’s terminated Summers’ employment.

             Ogborn prevailed against McDonald’s on claims of sexual harassment, premises liability, negligence, and false imprisonment, taking over $1 million in compensatory damages and $5 million in punitive damages.  Summers initially took $100,000 in compensatory damages and $1,000,000 in punitives for intentional infliction of emotional distress, but the Court of Appeals reduced Summers’ punitive damages award to $400,000.

             Of interest to employers will be the Court of Appeals’ conclusion that Ogborn could maintain her sexual harassment claim under the Kentucky Civil Rights Act (“KCRA”) although the strip search and sexual assault were instigated by a hoax caller and carried out by Nix, who was not a McDonald’s employee.    The court  further concluded that Ogborn’s KCRA claim did not pre-empt her tort claims for false imprisonment, premises liability, or negligent supervision of Summers, though the court noted in dictum that the statutory claim would have pre-empted Summers’ claim for intentional infliction of emotional distress, had she not surrendered it earlier in the case. The Court of Appeals stated in its opinion that Kentucky does indeed recognize a cause of action for negligent supervision of an employee, and concluded that McDonald’s was negligent in that way, although the jury had concluded that neither Summers nor Dockery, another manager, had themselves been negligent.  

             An obvious takeaway lesson from this case is that where an employer knows or under the circumstances should have known about a threat to employees’ safety, it should take every opportunity to ameliorate the threat, warn employees, and train them how to respond should the threat arise.   In this instance, an instruction from McDonald’s describing the hoax calls (which apparently had been made to McDonald’s stores in Somerset, Wiliamsburg, Leitchfield, Louisa, and Paintsville,  KY, as well as others across the country) and instructing employees to refer the calls to the actual police, or to corporate legal,  or even to request that the caller provide some credentials, might have made all the difference.