Toyota has settled a sexual harassment lawsuit against its former top US executive.

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According to Reuters, the lawsuit had threatened to become a major embarrassment at a time when Toyota’s sales have been booming in the United States and it is on the verge of overtaking General Motors as the world’s biggest car maker.


Toyota said in a statement cited by the news agency that it and the employee who brought the lawsuit against former Toyota North America CEO Hideaki Otaka had agreed to keep terms of the settlement confidential.


“We are very pleased to have resolved this matter in a way that all parties have agreed is fair, appropriate, and mutually satisfactory to all concerned,” Toyota Motor North America said in the statement.


The news agency said Sayaka Kobayashi, a Toyota employee, had filed a $US190m  lawsuit against the automaker accusing Otaka of sexually harassing her while other Toyota executives failed to act on her complaints.

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In the fallout from the lawsuit, Otaka, 65, was sent from New York in June to Japan to become an auditor at Tokyo affiliate Daihatsu Motor in Tokyo, Reuters added.


Otaka was replaced by Jim Press, the first American president of the Japanese carmakers US operating unit.


In her lawsuit, filed in New York state court in early May, Kobayashi, an employee in Toyota’s corporate planning office, sought $40m for injury to her career and emotional distress plus $150m in punitive damages, the report said.


Kobayashi, 42, reportedly had claimed in the lawsuit that Otaka repeatedly asked her to accompany him to lunches, walks in Central Park and on business trips, where he tried to engage in sexual conduct with her.


She said that her complaint to Toyota’s second-highest ranking US executive had been ignored, according to Reuters.