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Lessons from Gretchen Carlson's lawsuit against Fox News

California residents may be familiar with the lawsuit filed earlier in 2016 by former Fox News anchor Gretchen Carlson. Her suit, which alleged sexual harassment committed by Roger Ailes, the network’s then-CEO, was settled by Fox for a reported $20 million. There are several things to learn from Carlson’s lawsuit.

Sexual harassment is a prohibited form of workplace sex discrimination. After Carlson filed her suit, more women came forward with their claims. Ailes left the network two weeks after the suit was filed. Although he denied and continues to deny the allegations, Fox News announced that it had reached a settlement with Carlson soon after.

The news channel is paying for the settlement rather than Ailes. Employers are liable in situations such as what allegedly happened at Fox News. Another important thing to note is that how damages are allocated in a settlement is important for tax purposes. It is not clear how the damages were allocated in Carlson’s case, but the IRS has specific rules regarding the taxation of different types of damages. Damages that are for medical expenses related to physical or emotional harm are not taxed. Damages for lost wages, emotional harm that doesn’t result in injury and punitive damages are taxed by the IRS.

A person who has received unwelcome sexual advances in the workplace might want to talk to an employment law attorney in order to see how best to proceed. Legal counsel might suggest that the victim first pursue the complaint procedures set forth in the company manual. Should this prove ineffective, the next step might be to file a claim with the Equal Employment Opportunity Commission or applicable state agency.