The headline was Fox News agreed to pay $20 million to its former anchor Gretchen Carlson to settle a sexual harassment lawsuit against its former CEO Roger Ailes. This is an extraordinary settlement, and not just because of the amount. Fox News agreed to a public settlement (usually they are confidential); publicly apologized to Ms. Carlson (usually the employer denies the settlement is an admission of liability); agreed to pay only two months after the suit was filed; and paid even though Fox News itself was not a defendant in the case (Ms. Carlson sued only Ailes personally).
Ailes adamantly denied the allegations when the lawsuit was filed, and still maintains his innocence. But, in forcing Ailes out as CEO, followed by a settlement of this magnitude, Fox News is essentially admitting Ms. Carlson’s allegations about the culture of sexual harassment and retaliation at the network were true.
As is often the case with big money settlements in high profile cases, there has been lots of commentary about its broader significance. One prominent employment law blogger opined the settlement heralds a new era of sexual harassment claims, as aggrieved employees will expect big money for their claims as well. Others are concerned Fox’s admission it had a problem in its workplace culture is evidence that sexual harassment remains pervasive despite years of awareness and anti-harassment training.
I’m not convinced the Fox News settlement is so consequential, at least for most employers. The facts that make this case so noteworthy are unique–a former Miss American turned news anchor against a media icon who ran a right leaning and popular news network.
Nonetheless, there is a lesson here that is not necessarily new, but bears reminding. That is, clear policies, effective procedures, and regular training are important to prevent harassment and protect the company from claims. But, they make no difference if not followed when the alleged perpetrator is powerful, popular, or influential in the organization. A common temptation for other managers and even boards of directors is to look the other way, deny, or cover it up when a figure like Ailes is accused of sexual harassment or other misconduct. Since the Carlson lawsuit was filed, two former employees disclosed they received six and seven figure settlements years before from Fox for sexual harassment claims allegedly involving Ailes. Yet, he continued as CEO apparently without consequence. Even if Ailes could be given the benefit of the doubt after one such claim, two (and perhaps more) should have raised red flags there was a ticking time bomb in the CEO’s office.
Contrast the Ailes case with Hewlett Packard’s quick ouster of its prominent CEO after an investigation revealed he had engaged in an inappropriate relationship with an outside contractor. HP’s stock fell over 8% the day after, but in the end the company maintained its integrity. Whether Fox News can do so remains to be seen.
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