21st Century Fox to Gretchen Carlson: We're sorry -- here's $20M
21st Century Fox (FOXA) will pay Gretchen Carlson a reported $20 million to settle a sexual harassment lawsuit by the former TV anchor against former Fox News head Roger Ailes.
In announcing the settlement on Tuesday, the media and entertainment giant apologized to Carlson, saying that she “was not treated with the respect and dignity that she and all of our colleagues deserve.” The company also noted that “During her tenure at Fox News, Gretchen exhibited the highest standards of journalism and professionalism.”
New York-based 21st Century Fox and Carlson’s legal team didn’t immediately respond to requests for comment for this story.
In a statement also released by the company, Carlson, a former Miss America and Stanford University graduate who joined Fox News in 2005, thanked women who rallied to her cause on social media and shared their stories of being sexually harassed in the workplace.
Carlson said she is now “ready to move on to the next chapter of my life in which I will redouble my efforts to empower women in the workplace.” She did not elaborate on her future plans.
“No doubt it is an unusually high settlement,” said Gregg Lemley, an attorney at Ogletree, Deakins, Nash, Smoak & Stewart who specializes in employment law. “That doesn’t necessarily mean [21st Century Fox is] going to do it with every case because you may see a lot of folks that will come out of the woodwork and have allegations that are less salacious and credible.”
The media company’s public apology to Carlson is also uncommon, with Lemley saying that employers usually deny any wrongdoing as part of a sexual harassment settlement.
Carlson, 50, stunned the media world in July when she filed suit against Ailes, one of the most powerful people in broadcast news, alleging that he demoted her from Fox News’ high-profile morning show “Fox & Friends” after she rebuffed his sexual advances. She also claimed that Fox did nothing after she reported sexist and condescending behavior by Steve Doocy, her colleague on “Fox & Friends.” Moreover, Carlson took the unusual step of suing Ailes personally.
Gabriel Sherman, the national affairs editor at New York Magazine, said on Twitter Tuesday afternoon that a 21st Century Fox executive confirmed the company is paying the settlement, and that Ailes does not have to pay.
Although Ailes vehemently denied any wrongdoing, 21st Century Fox hired New York law firm Paul, Weiss Rifkind, Wharton & Garrison to conduct an internal investigation into Carlson’s claims. More than two dozen other women have come forward alleging similar behavior by Ailes, including Megyn Kelly, one of the network’s biggest stars.
Companies are sometimes insured against workplace misconduct by executives through so-called employment practices liability policies, though there are limits to this type of coverage. In a large settlement like the Carlson case, the defendant and the insurance company will negotiate a deal to determine how the costs will be recouped, Lemley said.
The revelations put the Murdoch family, which controls 21st Century Fox and its sister company News Corp. (NWSA) in a tough position. Ailes had been close to media mogul Rupert Murdoch for decades, with Fox News generating some $1 billion in earnings annually and accounting for about 20 percent of 21st Century Fox’s profits.
By contrast, Ailes’s relationship with Murdoch’s sons, James and Lachlan, was reportedly strained. The younger Murdochs have taken more prominent roles at their father’s media empire in recent years.
The Ailes saga is likely to continue. According to media reports, Ailes has hired attorney Charles Harder, who won Hulk Hogan’s successful case against Gawker, to mount a legal challenge against New York magazine and its writer Gabriel Sherman, who has written a critical biography of the television executive.
In other Fox news, the network announced the immediate departure of Fox News host Greta Van Susteren, one of the channel’s most prominent personalities.