Sexual Harassment and Settlement Agreements

Recent news surrounding Republican presidential candidate Herman Cain and allegations of sexual harassment against him have brought attention to the issue of how such complaints are often resolved. In at least three instances, employees of the National Restaurant Association, which Mr. Cain led in the late 1990’s, made accusations of inappropriate behavior against him. The media have reported that two of those cases resulted in settlement payments and confidentiality agreements. Because of the confidentiality agreements, the women who made the accusations have been unable to comment publicly. Few specific details of these cases are available to the public, and the people who have spoken with the media have generally requested anonymity, at least in part to protect the privacy of the women. Even without many details of what allegedly happened more than a decade ago, these cases offer a glimpse of how confidential settlements have become a common outcome in sexual harassment complaints. Sexual harassment attorneys and their clients should know the benefits and drawbacks of settling such claims.

An article published on CNN’s website discusses how many companies view settlement of claims like sexual harassment, usually with a payment to the complainant, as a “cost of doing business.” Businesses may find it more economically efficient to pay a cash sum to a complainant rather than face the risks of disputing or litigating the claims. These risks include not only legal expenses and possible loss at trial, but also the cost of having the complainants allegations aired in public. Settlement agreements may be a prudent business decision, particularly ones that include confidentiality provisions ranging from preventing disclosure of the settlement amount to preventing all parties from publicly discussing any aspect of the case.

Employees and others who suffered sexual harassment may also benefit from a settlement agreement. Complainants may also be spared the financial and emotional cost of litigation. In addition to saving on legal fees and related expenses, they can avoid the negative publicity that unfortunately often accompanies sexual harassment complaints. A complainant, often with the help of an attorney, can file a complaint with the Equal Employment Opportunity Commission or the New York City Commission on Human Rights, seek mediation, or in many cases file a lawsuit. Depending on the ultimate goal, reaching a settlement agreement provides the complainant with compensation and an opportunity to move forward. The overburdened courts in New York City in particular encourage settlement of cases whenever possible.

The most obvious drawback to settling for a complainant is the lack of a clear sense of “justice,” but that is in reality a very rare occurrence in legal disputes. The vast majority of disputes never see a courtroom, and the parties often prefer to work out a deal and go their separate ways. Confidentiality provisions in a settlement agreement may lack a sense of finality by keeping the allegations out of the public eye, but they also spare the complainant from the same attention.

In Herman Cain’s case, the National Restaurant Association appears to have made the settlement payments, perhaps saving both Mr. Cain and the organization from the cost of drawn-out disputes with the complainants. The downside for Mr. Cain is that, despite the confidentiality agreements, the mere existence of the disputes could come back to haunt him, as well as the details. Mr. Cain’s public comments to the media have now led the attorney for one of the complainants to request that the confidentiality agreement be lifted so his client may also comment in public.

The New York sexual harassment lawyers at Phillips & Associates represent employees who have had to endure a hostile and harassing workplace environment. To schedule a free and confidential consultation, contact the firm today.

Web Resources:

New York City Commission on Human Rights Homepage

More Blog Posts:

Kohl’s Faces Claim of Employment Discrimination Based on Medical Condition, New York Employment Attorney Blog, October 27, 2011
Protection Against Transgender Discrimination in Employment is Available to Some Employees, but Not All, New York Employment Attorney Blog, October 19, 2011
Restaurant Chain Accused of Age Discrimination in EEOC Lawsuit, New York Employment Attorney Blog, October 12, 2011
Photo credit: Herman Cain by Gage Skidmore, on Flickr

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