Delaware’s Court of Chancery Approves $90 Million Sexual Harassment Settlement

On February 9, 2018, Chancellor Bouchard of Delaware’s Court of Chancery approved a $90 million settlement in a derivative lawsuit alleging that directors and executives of Twenty-First Century Fox, Inc. (the “Company”) failed to monitor and appropriately respond to sexual harassment and racial discrimination at the Company.   See City of Monroe Employees’ Retirement System v Murdoch et al., Delaware Chancery Court, No. 2017-0833 (Del. Ch. Nov. 20, 2017).

In addition to cash, the settlement terms require the Company to implement corporate governance reforms.  As part of the required corporate governance reforms, the Company must operate a six-member Fox News Workplace Professionalism and Inclusion Council (the “Council”) for a period of 5 years. The Council is tasked with monitoring and recommending investigations into workplace harassment, discrimination and retaliation at the Company.

In approving the settlement, Chancellor Bouchard stated, “I will commend everyone in the room on what happened here.”  Chancellor Bouchard noted that the settlement was “pretty unusual” but that it was “a really sensible, practical way to resolve a really sticky situation.”  Chancellor Bouchard added, “there’s real meaning to the council.”

This settlement and the corresponding corporate governance reforms may serve as a framework for future cases involving sexual harassment and discrimination.