You and the Law: Call it legal extortion

(Part 1)

Sexual Harassment lawsuits have become a simple, cost-effective way for some lawyers to legally commit Blackmail and Extortion.

Why do I say legally? It's because an attorney can get away with making the kinds of threats which would send a non-lawyer to prison. I'll tell you about two cases where business owners were accused of sexual harassment with absolutely no independent, credible evidence supporting those claims.

If you are a business owner, or thinking of starting a business and hiring employees, today's story should be of special interest. There are steps which can be taken to help you avoid the expense, time loss and monumental worry these kinds of suits bring.

"He touched me in a bad way"

Dr. Tom was then 45, married, kids, happy family and successful in his Los Angeles Family Practice. He had never been sued in the 15 years that he was in private practice, nor a complaint made about the way he treated his staff or patients.

Two of his patients were a mother and her 17-year-old daughter, Bobbie, a bright young lady who graduated early from high school and was in a business college, wanted to become an executive secretary. Needing part-time help in the office, and knowing that money was tight for mom and daughter, he offered Bobbie the job.

But the doctor did not know that they had a secret. Bobbie had been diagnosed as a pathological liar. She made up stories to achieve various goals.

After working in his office for about six months, one day Bobbie didn't show up for work. Wondering why, the office manager phoned home, spoke with Mom, and was told, "Bobbie just doesn't want to work in the office anymore."

A week after that conversation a letter from a local attorney was hand delivered to Dr. Tom. It read, "Bobbie is prepared to file a suit against you alleging sexual battery which occurred during the course of a physical examination. This could easily come to the attention of the police, and you know what could happen. I suggest your lawyer contact my office and we attempt to resolve this matter out of court."

One week later, a meeting took place at the lawyer's office.

Dr. Tom acknowledged that he had examined Bobbie, when she was ill with what he suspected was pneumonia, or some other serious infection, and needed to rule out more threatening diseases. His nurse was in the room with them. Using a stethoscope, he listened to her chest, and palpated her neck, under her arms and elsewhere, looking for signs of swollen lymph glands. That was the "Sexual Battery," according to her lawyer, touching her breasts, or nearby without any medical justification."

"I firmly believe what you did was improper. We will settle for the payment, in one week, of $10,000 and a Confidentiality Agreement. If not, I am prepared to file suit, and my client is ready to make a police report," Bobbie's lawyer yelled.

When a physician is accused of anything to do with sexually improper conduct, be it in a law suit, or criminal prosecution, a career, reputation and a medical practice can be placed at great risk, if not completely destroyed, even if no criminal charges are filed and the doctor is cleared in the civil suit.

He paid the $10,000 under the advice of his attorney. He paid it the next day, with an agreement to keep the matter confidential. This all took place over 10 years ago.

Call it Karma, poetic justice or the hand of God, but ill-gotten gains come with a price, as three years after Dr. Tom paid the money, Bonnie's mother told him the truth about her daughter's mental condition. Mom was then terminally ill with bone cancer-one of the most painful.

"She asked to be forgiven. I told her that she should burn in hell for her betrayal," he emphatically told me.

"The hurt stays with you. To this day, I am so angry with all of them, especially the two I tried to help. I know some people might say it isn't right, but I'm still upset with my own lawyer. I should have defended myself," he told me. Call it "Buyers Remorse," or, more correctly, in this case, the reaction of an innocent man.

"If he doesn't give me days, I'll claim sexual harassment"

Nick runs a popular restaurant near San Francisco which serves the best artery-clogging southern style breakfasts and fried chicken this side of Bowling Green, Kentucky, which is where he learned his trade as a cook more than 40 years ago.

June had worked for Nick as an evening waitress for three months and constantly asked for days as the tips were greater. "She was hired by merely walking in one day after another waitress quit and I didn't have time to even get her to fill out a job application or do a background check," he told me. He'd regret that oversight soon enough.

If he had done so, her lengthy criminal record -- including theft, fraud, drugs, DUI -- would be easily discovered. But he learned those things after being sued for Quid Pro Quo sexual harassment. That means "sex for something," and in this case, June claimed that Nick told her, "I'll give you days if you do this to me."

Only, she told other employees that was exactly what she planned to do if he refused her demands! She also gave at least four different versions of what took place -- different sex acts, different statements, and most interestingly of all, she testified that her lawyer told her what to say to the police! It was all planned.

Fortunately for Nick, he had an experienced defense attorney, for during settlement discussions, he was able to whittle a $150,000 settlement demand down to $15,000. "Heck, that little con's lawyer only put about $5,000 in his pocket. We won, for if this had gone to court, I would be out at least $50,000 in my own attorney fees, win or lose, and you can always lose," he philosophically commented.

How do you protect yourself?

Dr. Tom and Nick had one thing in common: no insurance for these kinds of claims. They were lucky to have gotten out for so little, as sexual harassment or other suits against employers are frighteningly expensive.

The insurance policy which both Dr. Tom and Nick later purchased is something that anyone in business needs to consider. It is called Employment Practices Liability Insurance.

We'll look at those policies next week.