Settling a Discrimination or Harassment Lawsuit

GOP presidential contender Herman Cain has been in the news for more than his political platform recently. Instead of addressing issues like job creation, Cain has been facing tough questions about on-the-job harassment. Specifically, Cain is having to deal with charges of unlawful harassment leveled against him when he was the head of the National Restaurant Association in the 1990s.

There likely are multiple lessons that can be learned from this story but I’ll offer you just one. In short, employers should not dissuade this news story from settling a lawsuit or charge of discrimination brought by a current or former employee.

Contrary to what some of the pundits may claim, lots of people and businesses settle lawsuits even though they know they’ve done nothing wrong. This is the reality of today’s litigious society. There are a multitude of factors that get weighed when deciding whether and when to settle a lawsuit. But the equation is always based on business factors and is, by no means, an indication of “guilt” or “innocence.”

In fact, most settlement agreements include a confidentiality provision, whereby one or both sides agree not to disclose the terms of the settlement or to discuss the facts underlying the lawsuit. Sometimes, though, this is not the case, and, for a variety of reasons, the parties may agree in advance to what will be said, thereby ensuring that neither steps over the line and leaving no room for misunderstanding.

Which brings me back to Mr. Cain’s story. The individual who is claiming that she was harassed by Mr. Cain apparently entered into a settlement agreement to resolve the matter. It seems that, pursuant to the agreement, she received a settlement payment in exchange for her dropping her claims. Presumably, the agreement also included a confidentiality provision. And, presumably, she violated the provision by releasing information about her claim or the settlement. If that is the case, and she did renege on her promise, those who are following the story should consider how reliable the source really is.

But employers should, in my opinion, disregard the story altogether for the purposes of deciding whether or not to settle a lawsuit or potential lawsuit. Stick to the facts as applied to your particular business at this particular time. Settling a lawsuit is not, contrary to what some of the pundits might have us believe, an indicator of wrongdoing.