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Infosys Technologies has said its former director Phaneesh Murthy had settled a sexual harassment lawsuit filed against him by a former female employee, under which $800,000 have been paid.
While Phaneesh paid $400,000, the rest was paid by his insurers.
Infosys chairman and chief mentor N R Narayana Murthy said: "Infosys has learnt that the sexual harassment lawsuit filed by Jennifer Griffith, a former employee, against the company and Phaneesh Murthy, a former director, has been settled by Phaneesh Murthy and Griffith, shortly before October 29, 2004, the trial date set for the lawsuit. Infosys has now learnt that the settlement agreement was recently signed by the parties to the settlement agreement -- Phaneesh Murthy and Griffith."
In response to the announcement by Infosys, and contrary to his earlier stand, Phaneesh admitted to being a participant in the settlement.
Infosys has not contributed any money to the settlement and was not a signatory to the settlement agreement. The company learnt from its insurers' counsel that the settlement released Infosys from all claims and liabilities alleged in the lawsuit.
"Infosys learnt from its insurers' counsel that the insurers contributed $400,000 towards the settlement and this represented 50 per cent of the total settlement payments. The remaining 50 per cent contribution was paid by Phaneesh Murthy, since Infosys refused to make any contribution. As previously stated, the company has retained all rights against Phaneesh Murthy and did not release him from any claims it may have against him," Narayana Murthy said.
According to Phaneesh, who is now the CEO of iGate Global, "After the last iGate Global Board meeting, taking into consideration the momentum we are seeing in the company, I have chosen to participate in a settlement to close this case. This has been a very difficult decision for me, a clash of my personal beliefs and the responsibilities of running a large public company, and the implications of a CEO taking weeks/months off to fight a lawsuit. This is to ensure that this chapter is behind us, and in no way distracts from my current responsibilities at iGate. Due to the nature of the closure, I will not be able to comment any further on this issue."
Expressing happiness over Infosys' stand in the case, Narayana Murthy said, "I am glad that we stood by our objective of not contributing to the settlement of this sexual harassment case involving Phaneesh Murthy."