Sexual Harassment Costs Alarm Firm $1.7 Million

FRESNO, Calif. — A former employee of a residential alarm company was awarded $1.7 million by a jury that determined that the company had sexually harassed and battered her. The jury of six men and six women says Alarm One Inc.’s Fresno, Calif., office is at fault for its camaraderie-building exercise that included spanking Janet Orlando, 53, with a paddle.

The lone victory for Alarm One, based in Anaheim, Calif., was that the jury ruled Orlando had not suffered a sexual assault. However, the jury did order Alarm One to pay Orlando $10,000 for economic loss, $40,000 for future medical costs, $450,000 for emotional distress, pain and suffering, and $1.2 million in punitive damages.

The company admitted in court to the practice, but said that Orlando had participated willingly. Three other female employees subjected to the spankings alongside Orlando have settled out of court with Alarm One, which says it no longer conducts the spanking practice.

During the trial, Alarm One CFO Douglas Schultz testified that the suit — even before the jury reward — has caused financial hardship for the company, which has 21,000 customers. Schultz says the company has downsized from 300 to 50 employees and closed the Fresno office. Despite monthly revenue of $906,000, Schultz testified the company is in debt $38.7 million.

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