Harassment Settlement Costs – The Price of Being Accused of Sexual Harassment in the Workplace

Sexual harassment is a hot topic these days. Hollywood moguls, politicians, and businessmen have been falling left and right as women come forward to accuse them of inappropriate conduct.

While the American justice system is founded on the principle that people are innocent until proven guilty, sometimes even the accusation can end a career or smear a reputation.

What if you or the boss of your company is accused of sexual harassment? How should the accusation be handled and what might happen to the company? Would a harassment settlement destroy your company?

What is sexual harassment?

Sexual harassment usually takes one of two forms:

Quid pro quo: This means sexual favors are demanded in exchange for a raise, position, or other work benefits. Or it may simply be sex in exchange for not getting fired.

Hostile work environment: A workplace where people are demeaning and/or inappropriate and others are intimidated or made to feel very uncomfortable.

The Equal Employment Opportunity Commission (EEOC) enforces federal sexual harassment laws, and most states have a similiar agency for enforcing state laws.

What should you do if you’ve been accused of sexual harassment?

In a sexual harassment case, the burden of proof is on the accuser. This means that it is up to the person who makes the claim to prove that the alleged harassment happened. Once you’ve been accused, these are the steps you should take according to Jill Stanley, attorney and founder of the legal website Proof With Jill Stanley.

1) Hire an outside investigator

If you’re the boss, the best thing to do is to hire an outside agency to investigate the claims, says Stanley. Amazon did this, she says, when Roy Price was accused of sexual harassment .

“You can understand why it’s difficult to investigate someone within the company, particularly someone high up. To level the playing field, it’s best to hire an outside investigator. Whether the accused claims they are innocent or guilty, it’s a good idea.”

2) Get an attorney

Depending on the company’s insurance policy, most plans provide an attorney. “However, oftentimes intentional acts or acts outside the scope of employment aren’t covered,” explains Stanley. Either way, you’re going to want to consult one as fast as you can.

3) Apologize and settle

“Settling is not losing,” says Stanley. “Parties settle cases for many reasons. It’s not a statement of guilt or innocence. Oftentimes it is the best approach for both sides.

If by settling the matter a company can send a message that sexual harassment matters are taken seriously and if new policy changes or more training is instituted because of the settlement, the company morale can be salvaged — even if it was someone high up who was doing the harassing.

For a victim, settling has advantages as well: There are less stress and much more certainty in settling than if the case is brought the case all the way to trial.”

“We as women are going to hold people accountable if they violate the law,” Stanley adds, “But we want change too. We’re not just looking for money; we’re looking for justice that sparks change. A settlement is good, but not a settlement that mandates the execution of a non disclosure agreement (NDA).

When a settlement is shrouded in silence, that doesn’t help anyone but the harasser and the employer. That’s what happened with Weinstein. He was settling all these cases but none of the victims could talk about them. If the case goes to trial and a judge or jury renders a verdict, an NDA would not be part of that judgment.”

What if the accused is the boss, is the company at risk? In cases where the boss goes down, will the company collapse? That all depends.

Your company structure matters when it comes to a harrasment settlment

What does the organizational chart of the company look like? There were people right behind Harvey Weinstein, for example, with influence and control, so you could argue that The Weinstein Company would be fine despite allegations of sexual harassment and assault levied against the company head.

“However, there was a culture of silence and knowledge,” says Stanley. “Because of this, the allegations are damaging the company as a whole. We’ve lost trust in the rest of the people at the company. Other company leaders appeared to know what was going on and they were protecting Harvey. Now people are pulling out of projects and the company is getting sued left and right.”

A smaller, less well-known company, however, may not suffer repercussions in the same way. Let’s say a fabric store owner, for example, is accused of harassing an employee. “If it’s a small, mom and pop shop, then the repercussions would be quite different than something like the Weinstein case, which has blown up on the public stage, with more than 80 women accusing Weinstein of wrongdoing,” says Stanley.

“If everyone knows the fabric store owner and thinks he’s a good guy, and there’s only one accusation — that is public — then the case is more difficult. The problem is we often don’t believe accusations when there is only one victim. We have a hard time finding the lone victim credible, because how could it be that for years the shop owner never did anything wrong and then all of sudden he did? Well, if five women tell the same story, then we start to believe. That’s a sad reality.”

“However, if I have a choice, I’m going to choose a company where no one has been accused of sexual harassment,” adds Stanley

The cost of being accused

The accusation itself can damage a company’s reputation, but what are the potential monetary costs of a sexual harassment suit?

This depends on type of suit and how many accusers have come forward. But Stanley says settlements range from the thousands to the millions depending on the type of behavior that occurred and the damages suffered.

It also depends on what damages the victim can actually prove. “If a plaintiff can prove the company knew or had reason to know of the behavior, yet did nothing about it, that’s when we see the higher numbers,” she says.

“These are not cheap cases. They are expensive for all parties in terms of money, emotional costs, and the damage the can wreak on reputations. There are big costs associated with pursuing and defending these types of cases.”

While there are many ways to finance legal fees, many people use a personal loan to help cover costs.

Click here to compare lenders and find the best one for you.

Change is coming

After the Weinstein story broke in October of 2017, Stanley says visits to the EEOC sites doubled and the organization also got a lot of calls about workplace training programs.

So whether you’re running a company and being accused of inappropriate conduct, or you’re the victim of sexual harassment, expect some big changes to company policy in the coming year.

Featured lenders for personal loans

Lending PartnerMinimum FICO scoreEstimated APR 
60015.49% – 34.99%*Apply
6804.99% – 14.24% (with AutoPay)*Apply
5.49% – 14.29% APR (with AutoPay)*
4.98% – 11.44% APR (with AutoPay)*
6605.99% – 35.89%*Apply
6204.93% – 29.99%*Apply
5809.95% – 35.99%*Apply
7005.25% – 12%*Apply