Guess Jeans Founder Hit with Largest Employment Verdict

In Choi v. Marciano, a Los Angeles jury awarded America’s largest 2009 verdict against Guess Jeans mogul George Marciano. This verdict is worth special attention, because the underlying lawsuit arose out of an employment matter. Five former Guess employees claimed that Marciano defamed them when he accused them of stealing and sued them for embezzlement. Each employee was awarded $74 million for a total of $370 million.

It’s not all that uncommon for employees to sue former employers that supposedly badmouth them after their termination. It is uncommon for employees to win these lawsuits . It’s ever more uncommon for such a case to produce the largest verdict of the year according to Lawyers USA.

According to the employees, Marciano used his wealth and connections to cause investigations, tax audits, and accusations against them, all of which ended up in the newspaper or on Internet sites. Marciano then sued the former employees claiming, among other things, that they had stolen from him money, art, wine, and coin collections. His lawsuit was dismissed.

The former employees’ lawsuit against him was not dismissed. Indeed, Marciano was found to have engaged in “malicious and oppressive” conduct, defaming the former employees and causing them emotional distress.  The employees were awarded compensatory and punitive damages.

A couple of quick lessons. First, be careful what you say about former employees. Before you accuse them of theft, you better be sure you have your ducks in a row. Before you provide any negative information about them to a third party, get some legal advice.  Second, as much as terminated employees may make you so mad you’d like to sue them, don’t cut off your nose to spite your face. Such lawsuits can be turned against you if you lose and result in financial disfigurement.