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Why did Dial Corporation suddenly decide to settle with the Equal Employment Opportunity Commission four years into a highly publicized sexual harassment case? Interviews with Dial and EEOC attorneys suggest that the reasons lie in pretrial rulings, by U.S. district court judge Warren Urbom of the Northern District of Illinois in April, most of which went the EEOC’s way. Perhaps more importantly, Dial CEO Herbert Baum, who took over in August 2000, may have been unwilling to see his reputation besmirched by problems that occurred mostly under his predecessors. The Terms The consent decree approved by Urbom on April 29 requires the Scottsdale, Arizona�headquartered soap-manufacturer to pay $10 million into a compensation fund, beef up enforcement of its antiharassment policy, and submit to two-and-a-half years of monitoring by an independent panel. (In mid-May, Nancy Kreiter, research director at Chicago-based advocacy group Women Employed, was chosen as the EEOC’s representative on that panel; two additional appointments will be made.) The company did not admit fault. The EEOC will distribute the $10 million to victims of harassment who have worked at Dial’s Montgomery, Illinois, plant since 1998. Women who were not members of the original 91-victim class may still be eligible for compensation. The Rulings One of the key pretrial themes was how far back the EEOC could delve in making its case. The agency sought to introduce evidence going back to the 1970s in order to establish a pattern of sexual harassment. Dial argued that the cutoff should be 1991. Company lawyers noted that Congress changed the law that year to permit monetary damages for sexual harassment available, but only prospectively. Urbom split the difference, ruling that the EEOC could introduce evidence dating back to 1986, but no further. Both EEOC attorney John Knight and Dial counsel Camille Olson, a partner with Chicago’s Seyfarth Shaw, characterize the decision as a victory for their sides. Olson suggests that the decision may have made the EEOC more prone to settle, because the worst evidence against Dial was also the oldest. Knight says that the EEOC had plenty of recent evidence. Urbom also rejected Dial’s challenge to his plan for the trial. It called for four separate phases, which could have tied the company up in litigation for years. Olson says that the ruling weighed heavily in its decision to settle. In a final blow to Dial, Urbom ruled that the company could not introduce testimony about class members’ profanity and sexual histories, evidence the company claimed demonstrated that many class members welcomed sexual attention. Consumer Appeal Employment law experts have expressed surprise that Dial did not settle earlier. But Joseph Sellers, a class action specialist at Washington’s Cohen, Milstein, Hausfeld & Toll, says he’s seen similar intransigence. “Executives are sometimes hesitant to take responsibility because they know that they would have to give an explanation to shareholders,” he says. New management, on the other hand, can portray a settlement as cleaning up the mess left by predecessors. EEOC attorney Noelle Brennan notes that on April 25, Baum, who became CEO in 2000, told the Arizona Republic: “It really hasn’t happened on our watch. . . . We need to dispose of it.” Baum did not return calls seeking comment. A Dial publicist says the company decided to settle with the EEOC for business reasons.
A version of this story originally appeared in The National Law Journal, a sibling publication of Corporate Counsel and a part of American Lawyer Media.

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