In July 2016, former Fox News employee Gretchen Carlson filed a lawsuit against the CEO of the network Roger Ailes. In a relatively short period of time, she obtained a $20 million settlement, and he left the company within two weeks of the suit being filed. Those who handle discrimination cases noted that the case likely was resolved as fast as it was because it would have resulted in a unfavorable outcome otherwise.
In some cases, employers will settle suits simply to ensure that they don’t have to spend a lot of time or money on them. They also hope that settling a case will result in confidentiality. However, that did not happen in the Carlson case as news of the suit and the amount she won quickly made the rounds through various media outlets.
What wasn’t disclosed is how the money was allocated. While a settlement may be taxed like a judgment, it may be possible to receive the money in a way that is most tax efficient. For instance, lost wages, punitive damages or damages awarded for emotional harm are taxable income while damages related to physical harm or emotional harm causing medical attention are generally not. However, damages related to physical harm that are classified as punitive damages are still taxable.
Those who receive requests for sexual favors or who receive unwanted sexual advances may wish to pursue legal action against their employers. They may be entitled to a variety of damages including reimbursement for lost wages or punitive damages. An attorney may be able to review a case to determine if an employee was subjected to a hostile working environment. Cases may be resolved either through negotiations outside of court or settled through a formal trial.