Mark McInnes to fight David Jones harassment case, but lawyers still expect a settlement

Former David Jones chief executive Mark McInnes has promised to “vigorously defend” allegations made against him in a $37 million sexual harassment case, but legal experts say the retail giant and its former boss are still likely to pursue a quick settlement.

Workplace lawyers also say David Jones is likely to have provided McInnes with an indemnity against further legal claims as part of his termination settlement with the company.

While it is not clear whether such as indemnity or release was part of David Jones’ confidential settlement with McInnes (which included a $1.5 million termination payment), workplace lawyer Andrew Douglas of Douglas Workplace & Litigation, says an indemnity is a common part of such a termination settlement.

While he expects David Jones would seek to argue that the company and its board were not aware of McInnes’ alleged behaviour, he says the fact that an indemnity or release against further legal claims may have been a part of the termination agreement means the company’s liability will be “difficult to separate” from that of McInnes.

A spokesman for David Jones was not available for comment prior to publication.

McInnes said in a statement released yesterday that he “rejected many of the recent specific allegations” made by former David Jones publicist Kristy Fraser-Kirk, who has lodged a $37 million claim against the company, McInnes and its board members, alleging she was sexually harassed on a number of occasions.

“Legally I have no alternative other than to vigorously contest them and I will,” McInnes said.

Despite the strong statement, Douglas and other workplace lawyers expect the legal teams of Fraser-Kirk, David Jones and McInnes will be looking to get a single, total settlement in place as quickly as possible.

Douglas says that while McInnes needed to “engage quite strongly” in the case to protect his reputation, he will still be keen to settle.

Other lawyers agree. “If DJs are going to put up money that is going to get McInnes out of this, you might find his outrage suddenly disappears,” one lawyer told SmartCompany this morning.

Douglas says the terms of the settlement will almost certainly be confidential, and expects damages will be between $600,000 and $1 million.

“Businesses like this have just got to settle,” he says.