By Keach Hagey 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 21, 2017).

21st Century Fox has set up a committee of outside experts to help Fox News improve its workplace culture as part of a settlement with a shareholder who accused the company of breaching its fiduciary duty by failing to clean up the news network's "hostile work environment."

The shareholder, the City of Monroe Employees' Retirement System, filed the derivative complaint Monday in Delaware Chancery Court against 21st Century Fox and its board. The settlement agreement, announced simultaneously by 21st Century Fox, was the result of more than a year of talks between the investor and the company.

The settlement includes a $90 million payment to 21st Century Fox from its third-party insurers, the company said. In a derivative complaint, shareholders sue the board on behalf of the company itself rather than for their own benefit, meaning that any damages recovered would be returned to the company, less any attorney's fees and court expenses.

Monday's settlement didn't include any admission of wrongdoing by the defendants.

In the complaint, the shareholder argued that 21st Century Fox was harmed as a result of "the systemic, decades long culture of sexual harassment, racial discrimination and retaliation that led to a hostile work environment at Fox News Channel." The issues at Fox News came to light over the past year and a half in a series of highly public scandals and settlements, leading to the departure of many of the channel's top executives and talent.

Fox News has been rocked by a series of sexual-harassment scandals since the summer of 2016, when former anchor Gretchen Carlson sued Fox News Chairman Roger Ailes, alleging sexual harassment and retaliation. The company launched an internal probe, and over the next several months, more women came forward with similar allegations against Mr. Ailes.

The shareholder complaint alleged that this environment "should not have been invisible" to the parent company.

The City of Monroe Employees' Retirement System also sued for the "unjust enrichment" of Mr. Ailes's estate, according to the complaint.

Mr. Ailes, who denied the allegations, left Fox in July 2016 with an exit package worth more than $40 million. He died in May.

21st Century Fox has paid $50 million in costs and fees related to settling sexual-harassment complaints at Fox News, according to a company filing in August.

The wave of sexual-harassment allegations also claimed the job of Bill O'Reilly, the channel's star anchor, who left in April after the New York Times reported that he and Fox News had paid to resolve several harassment accusations against him. Mr. O'Reilly has denied the allegations. 21st Century Fox was aware that Mr. O'Reilly had reached a sexual harassment settlement with a network analyst -- but not the size of the settlement -- before Fox News renewed his contract in February, The Wall Street Journal previously reported.

21st Century Fox and Journal-parent News Corp share common ownership.

The settlement comes amid a broad cultural reappraisal of workplace sexual misconduct that gained speed after allegations of years of abuse by Hollywood producer Harvey Weinstein surfaced publicly in early October. Mr. Weinstein has apologized for his past behavior with colleagues but denied allegations of nonconsensual sex.

Since then, an increasing number of high-profile men in media, entertainment and politics have had their careers derailed by accusations of sexual misconduct, including comedian Louis C.K. and political analyst Mark Halperin. Both expressed remorse, and Mr. Halperin denied some of the allegations.

On Monday, the New York Times suspended political reporter Glenn Thrush following a report of inappropriate behavior toward women. Mr. Thrush apologized "to any woman who felt uncomfortable" in his presence.

Meanwhile, companies across the spectrum have taken harder looks at their policies and how their employees work with one another.

21st Century Fox says it has already taken some measures to improve its workplace culture, including continuing its discrimination and harassment training.

As part of the settlement, the company has established the Fox News Workplace Professionalism and Inclusion Council to advise Fox News and its senior management on how to make sure the channel has an appropriate workplace environment, as well as strengthen the procedure for reporting violations, increase human-resources training and improve recruitment and advancement of women and minorities, the company said. A majority of the council members will be from outside the company.

--Lukas I. Alpert contributed to this article.

 

(END) Dow Jones Newswires

November 21, 2017 02:47 ET (07:47 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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