Fox in Settlement Of Investor Suit on Sexual Harassment -- WSJ
November 21 2017 - 03:02AM
Dow Jones News
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)
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