With details about Herman Cain’s alleged harassment of female employees still only trickling out, much of the speculation has focused on the amounts of money Cain’s organization, the National Restaurant Association, paid to the women in settlements.
One woman reportedly got $35,000 to settle her complaint, another woman $45,000. In each case, that amount represented a severance approaching one year’s salary. People wonder: What do those (reported) facts tell us about the seriousness of the allegations?
That kind of speculation, at this point, is bound to be inconclusive. What has struck me, on the other hand, is what these facts certainly tell us about the cost of our society’s litigiousness.
At the Power Line blog, John Hinderaker passes along some analysis from a reader he does not name, but whom he describes as “one of the country’s leading experts in this area of the law”:
In my opinion, the reported settlement sums — $35,000 and $45,000 — do not exceed “nuisance value.” In fact, the nuisance value of a sexual harassment claim based on the alleged misconduct of the head of an organization in the late 1990s was probably higher than these sums. Sexual harassment claims have much more potential for embarrassment than ordinary discrimination claims. And in the classic “he says, she says” situation, the outcome is usually much harder to predict. Hence the extra incentive to settle regardless of the merits.
Hinderaker’s correspondent goes on to observe that, if the accuser feels she can move easily into a comparable job, she might well settle for an amount that doesn’t exceed “nuisance value,” even if she truly was harassed, simply because she wants to move on with her life. Again, we can’t say whether these amounts signal real harassment. Hinderaker, an attorney himself, makes this observation:
Frankly, hard as this may be for many people to understand, $40,000 in the context of lawsuits is chump change. Amounts of this sort are constantly paid to people who had lousy claims, at best, and who were almost certainly lying.
I want to expand on that point. First, let’s stipulate that “nuisance” payments are one price we as a society pay for having a high legal threshold (”severe or pervasive” behavior, according to Hinderaker’s correspondent) for proving someone is guilty of harassment. It’s a way of balancing protections to both the accused and the accuser.
However, this system almost certainly encourages false claims, and that is an excessive price to pay.
Cain was head of the National Restaurant Association from 1996 to 1999. In those years, the Census Bureau reports, the U.S. median household income ranged from about $35,500 to about $40,700. In other words, our litigiousness means that someone back then could have concocted a false but plausible harassment claim, and it might well have been worth an employer’s while to pay them as much or more money as half the households in the entire United States earned each of those years just to go away.
Now, consider that this doesn’t even include the cost of handling such complaints. Consider, too, that this is just one area of litigation — there are many others (medical malpractice is an obvious one). How many jobs haven’t been created over the past couple of decades because employers are paying some people not to work, but just to shut up and go away?
This situation is also bad for real victims. Consider that the false claims — and the fact that everyone knows they exist, and resent the costs they represent — make it harder for people with legitimate claims to be taken as seriously as they should be. When lots of people cry wolf, everyone is viewed more skeptically.
I don’t know whether Herman Cain did anything wrong. But I do know that false allegations, by anyone, against anyone, end up costing all of us.
– By Kyle Wingfield