The Philadelphia Inquirer has reported yet more information about sexual harassment actions involving the high-ranking official of an agency of the City of Philadelphia that we blogged about last week. The paper is reporting that the agency settled four harassment cases, perhaps involving the same official dating back to 2004. The reports also allege that at least one of the settlements was structured to avoid a required vote by the agency's board.

According to the article, the agency settled a 2004 sexual harassment claim involving the official for $200,000.  The agency's contribution to the settlement, however, was $99,000, with the balance coming from the agency's insurance company. But if the agency had contributed $100,000, it would have been required to notify its board of directors, the paper reported on Saturday.

Also noted by the article is that the agency's insurance contract has a $150,000 deductible for any claims against the official. A deductible is an amount that the insured party, here, the agency, has to pay at the outset of a claim. Typically, an insurance company is not liable for any defense or settlement payments until the deductible amount has been exhausted; the insured pays all costs up to the point of the deductible. That raises a question as to how the agency got away with paying only $99,000, the amount that would avoid board scrutiny.

The official has now been suspended by the agency.

The article also states the settlement amounts of two other cases involving the agency, one in 2004 for $98,000 and one in 2008 for $350,000. A fourth case is reportedly near settlement.

Some words of caution are in order. First, cases settle on their own facts, the details of which are not reported here, and thus these settlement numbers do not necessarily reflect what might occur in any given case. Further, these settlements do reflect that cases settle for greater amounts in the City of Philadelphia than in other regions of Pennsylvania, and thus should not be taken as evidence that a similar sexual harassment claim elsewhere ought to settle for the same amount. Still, the article is illuminating as to the impact of insurance on settlement of harassment claims. It also alleges an interesting set of facts--sometimes even the "boss" has someone to report to, and may desire not having to disclose his or her alleged wrongdoing to superiors.

 

The Philadelphia Inquirer noted that the PHA's insurance contract has a $150,000 deductible for any claims against the agency's executive director. That means that the agency was required to pay the first $150,000 of any claim against Greene before the insurance would kick in.  That led to the question of how the agency got away with paying only $99,000, the amount that would avoid board scrutiny.

Street explained that the agency paid the $150,000 deductibles directly to the insurance company, which didn't raise the same red flags a direct payment to a plaintiff would have.

"The authority would write a check to the insurance carrier, as opposed to writing a check to plaintiffs. This may have been a way of getting around the board regulation," Street explained.

Greene has now been suspended by the PHA, and the agency is the subject of a federal investigation.

In 2004, two women filed sexual harassment complaints against Greene with the Pennsylvania Human Relations Commission. On his behalf, the PHA settled the cases, one for $200,000 and one for $98,000. A third woman filed a case against Greene in 2008, and it was settled for $350,000. A fourth case is currently near settlement for an expected $250,000.

Source:

"Philadelphia Housing Authority settlement in 2004 skirted agency rules, Street says" (Philadelphia Inquirer, August 28, 2010)