Fox settles sexual harassment suit with Gretchen Carlson

An ex-anchor’s claim of sexual harassment that led to CEO Roger Ailes leaving Fox News has been settled for $US20m.

Former Fox News anchor Gretchen Carlson. Picture: Noam Galai/Getty Images.

Looking to close a dark chapter and avoid potentially embarrassing revelations, 21st Century Fox settled a lawsuit brought by former Fox News anchor Gretchen Carlson, who accused the network’s former chairman and chief executive, Roger Ailes, of sexually harassing her.

The size of the settlement wasn’t disclosed, but a person with knowledge of the deal said it was about $US20 million.

“We sincerely regret and apologise for the fact that Gretchen was not treated with the respect and dignity that she and all of our colleagues deserve,” 21st Century Fox said in a statement.

Ms Carlson, in the same statement, said she was “ready to move on” and plans to redouble her “efforts to empower women in the workplace.”

Mr Ailes, who has denied all allegations of harassment, resigned in July amid a broader internal investigation of accusations against him.

In addition to the arrangement with Ms Carlson, 21st Century Fox also has settled with several other women who came forward with similar allegations during the probe, an executive close to the situation said.

The women were all on-air personalities for units overseen by Mr Ailes, which besides Fox News included Fox Business Network and 21st Century Fox’s local television stations. Mr Ailes’s lawyer, Susan Estrich, declined to comment on the settlements.

For more than a decade, Fox News has steadily generated strong ratings and big profits. The allegations against Mr Ailes became a major distraction in the midst of a heated presidential race, leaving 21st Century Fox to try to restore order and ease fears about how Fox News will fare without Mr Ailes.

While settling the Carlson suit removes one headache for the network, another emerged, with Fox News announcing that news anchor Greta Van Susteren was leaving the network after 14 years. Ms Van Susteren exercised a clause that voided her contract if Mr Ailes left.

For Fox News and 21st Century Fox, a motivating factor to settle with Ms Carlson was the likelihood that a trial would air more dirty laundry about the channel and the company, said people familiar with the matter. As for the probe into Mr. Ailes by 21st Century Fox and the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, a 21st Century Fox spokeswoman said it was “winding down.”

Although Ms Carlson sued Mr Ailes personally, and not Fox News or 21st Century Fox, the company is paying for the settlement because Mr Ailes’s contract included an indemnification clause. Mr Ailes left Fox News with $US40 million in salary and bonuses that were owed to him under his current contract.

The $US20 million paid to Ms Carlson is “an enormous settlement for any single-plaintiff sexual-harassment case,” and came with a rare public apology, said Jay P. Holland, an employment lawyer and principal at Joseph, Greenwald & Laake, who wasn’t involved in the case. “Fox clearly came to the conclusion that they had to settle, and to do it fast, and move on.”

The Carlson settlement doesn’t end all of the legal battles against Mr Ailes and Fox News. Former Fox News host Andrea Tantaros has also filed a lawsuit that accuses Mr Ailes of sexually harassing her. Fox News has responded in a legal filing, describing Ms Tantaros’s claims as “a smokescreen to obscure her violation of her employment contract.”

Mr Ailes was replaced as chairman by 21st Century Fox Executive Chairman Rupert Murdoch, who subsequently appointed two Fox News veterans — Bill Shine and Jack Abernethy — as co-presidents of news and business, respectively. 21st Century Fox and News Corp, parent company of The Wall Street Journal, share common ownership.

Separately, Fox News said that Ms Van Susteren, who anchored the 7pm EDT news show “On the Record,” will be replaced through the November election by Brit Hume, who anchors much of the network’s political coverage.

Ms Van Susteren, who had publicly supported Mr Ailes after Ms Carlson filed her suit, said on Facebook that “Fox has not felt like home to me for a few years now.”

As part of her contract, Ms Van Susteren had a clause that allowed her to exit the network if Mr Ailes was no longer chairman and CEO, people familiar with the situation said. Ms Van Susteren sought to use that as an opportunity to renegotiate her current contract, which was a different interpretation of the clause than the one that was held by Fox News and 21st Century Fox, the people said.

Greta Van Susteren

Attorney John Coale, who is married to Ms Van Susteren and represents her, took issue with that assessment. “There’s a lot more to the contract than that,” he said.

Other prominent Fox News personalities with the so-called “key man” clause include prime-time stars Bill O’Reilly and Sean Hannity and lead breaking-news anchor Shepard Smith. Megyn Kelly, whose contract is up next year, doesn’t have such a clause, a person with knowledge of the matter said.

Mr Smith’s agent declined to comment, as did Mr Hannity and his agent. Representatives for Mr O’Reilly and Ms Kelly didn’t respond to requests for comment.

21st Century Fox and News Corp, parent company of The Australian, share common ownership.

Dow Jones