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By: Mark C. Stephenson
Fox news announced that it will pay a shocking $20 million to former TV personality Gretchen Carlson to resolve what is the most prominent of a swarm of embarrassing sexual harassment claims made against founder and former Fox News CEO Roger Ailes by at least 20 women. Fox News is reported to have settled two additional claims with women not yet named. Carlson sued Ailes individually in federal court in New Jersey in a strategic end-run to avoid a mandatory arbitration provision in her network employment contract. Reportedly, Fox News will fund the settlement, effectively acting as Ailes’ insurer for at least these three claims.
FMG closely monitors verdicts and settlements of lawsuits brought under New Jersey’s Law Against Discrimination (“LAD”) and Conscientious Employee Protection Act (“CEPA”). Until today, one of the highest verdicts returned in a LAD sexual harassment claim was in Kessler v WWOR-TV, where a jury returned a plaintiff’s verdict of $7.3 million on allegations of sexual harassment and retaliatory discharge. That verdict was reversed and the matter settled before retrial. Assuming the Kessler suit resolved on remand for half of the verdict amount, the Carlson settlement would be 500% over the hypothetical Kessler resolution.
Historically, when LAD and CEPA claims of retaliatory discharge resulted in compensatory damage awards, juries awarded on average not more than $500,000, with punitive damage awards running about $100,000 behind. While these are significant amounts, the Carlson settlement gives plaintiff’s counsel an opportunity to argue that society’s condemnation of sexual harassment and other abuse of women has coalesced such that the scale of compensatory and punitive awards – at least in the Northeast corridor – have ratcheted to a new level. The old adage is that a rising tide lifts all boats; is the Carlson settlement such a tide?