Posted On: June 18, 2013

Sexual Harassment Agreements

So you filed a sexual harassment case with the Illinois Department of Human Rights ("IDHR") and now the company wants to talk settlement. Or perhaps your attorney sent a demand letter to the company and there are now settlement talks. What can you expect in the agreement if you come to terms with the company? Sometimes what is in the agreement is as important if not more important than the money you will receive. A few things about the money you will receive first. You have to pay taxes on your portion. The only part that will be tax exempt is money for emotional distress attributed to a physical injury or money to reimburse you for medical expenses and attorney fees. So if you settle your case for $60,000 and your attorney gets $20,000, you have to pay taxes on the $40,000. Of course you should always check with a CPA or tax advisor on how best to treat any money you may get from a settlement.

So aside from the money what else is important as part of the settlement? Well, if you were fired, immediately file for unemployment and as part of a settlement both parties can agree that the company will list as the reason for your termination was performance not misconduct. You can collect unemployment if you are fired for poor performance but not if you were fired for misconduct. Collecting unemployment can be lucrative and the amount you receive may equal or exceed the settlement amount. This is an important item that should not be overlooked in the settlement agreement. Another key item is a neutral job reference letter, which should be attached to the agreement as an exhibit. You don't want any future employers contacting the employer who fired you and getting any negative information about you. With the inclusion of language and a neutral job reference letter in the agreement you can be assured that the only thing a future employer will learn about you is what is written in the letter. Again, this can affect your future earning and is as important as the settlement amount.

Another important item in the agreement is a confidentiality clause. This protects both the company and employee from negative publicity. However, I believe this clause protects the company more and therefore the company should pay a premium if they want this included in the agreement. This is where an experienced Chicago sexual harassment lawyer can negotiate effectively on an employees behalf. Also in an successful agreement is the inclusion of a non-disparagement clause. This protects the employee from being bad mouthed by the company and company employees. In many industries, people know one another and talk amongst themselves. The last thing an employee wants or needs is to have negative comments made against her. This could affect future employment as no company wants to hire a person that seems to have trouble at work. There should also be an inclusion of a clause that allows for attorney fees in the event the company violates the agreement. Without this clause, an employee could spend tens of thousands on legal fees if a contested issue were to arise.