Infy settles harassment lawsuit for $ 3m

BANGALORE: Infy has entered into a settlement with Reka Maximovitch in connection with a sexual harassment case she filed against Phaneesh Murthy, a former member of the board and the company.

The company has settled the lawsuit for a sum of $3 million to the plaintiff. While Infy contributed 1.5 million, the rest was given by the insurers under the company's Directors and Officers Liability Insurance cover.

Phaneesh Murthy, did not contribute any money towards the settlement with Maximovitch done on April 25.

Addressing a news gathering in Bangalore, Chaiman and Chief Mentor Narayan Murthy said, “The company had to go in for an out of court settlement because of various reasons. One, the case posed a risk to the company under the Californian Law. Two, this sexual harassment case was a great distraction to the normal working of the company and that this was a point of concern to the company." He also said that the management could not afford to waste more time mulling over this case.

Phaneesh Murthy had not kept the company informed about many things. Foremost, was that Reka Maximovitch had filed the charge of discrimination and a restraining order in November 2001. The lawsuit was brought to the company’s notice only in July 2002.

"The company retains all rights to proceed with legal action against Phaneesh Murthy. The litigation with the plaintiff is behind us. We have taken further steps to strengthen our internal processes and improve the checks and balances to handle similar situations," Murthy added.

The legal costs for the harassment case run upto $900,000, but almost 80 per cent of the sum would be reimbursed by a consortium of insurers.

Nandan M. Nilekani, CEO, President and Managing Director, said, "Our earnings guidance provided on April 10, 2003 for the quarter ending June 30, 2003 and the year ending March 31, 2004 remains unchanged. This settlement does not materially impact the earnings guidance."

Infy- a safer place for women

For Infosys, the worst is over. With a sexual harassment case slapped againt a senior member of the board and the company, things could have been more awry, as the lawsuit could have had other financial ramifications. The much talked about case brings in the issue of the security in the corporate sector.

Mohandas Pai, Director Finance and Administration says that the company has always believed in justice and that women have always been treated with respect. However, this lawsuit has sensitized the company further. Infosys is training and educating its employees about sexual harassment and its basic definitions.

Responding to a query by CIOL, Narayanamurthy said, "The company has always been safe for women and we ensure security for all of them."