One Reason Employers Settle Employment Disputes
Herman Cain is in the news for all the wrong reasons. During his tenure at the National Restaurant Association the Association apparently settled two complaints of sexual harassment involving Cain.
I have no idea what the underlying allegations were against Cain or whether the settlements were made to avoid inconvenience and buy peace or because the allegations had legs and carried potential exposure. I know one thing about the Cain complaints --continued defense of the complaints would carry additional significant expense to the Association.
Employers settle employment disputes for all manner of reasons; but rarely because the employer believes it violated the law. Litigation is expensive, distracting and inconvenient for companies. While the statutory damages caps for federal employment civil rights claims have not increased in twenty years, the rates of attorneys defending those cases have increased many times over. A $300,000 damages cap case in 1991 was much more significant compared with the fees that would be incurred in defending that case. Today, the attorney's fees incurred in defending the same case would be a much greater percentage of the potential damages as it would have been in 1991.
For the same reasons employers should not use arrest records in making hiring decisions (i.e., arrests are no indicia of guilt), the mere fact a company settled an employment dispute is no indication that the law was violated.
