What a mess! A settlement has been reached. The payment is due to be made. All the three parties to the case are living their own lives. But the issue just doesn’t seem to settle down elegantly.

A year-and-a-half ago, Reka Maximovitch filed a sexual harassment case against Infosys Technologies and its high-profile director (sales and marketing) Phaneesh Murthy. Late this April, Infosys closed the case with a $3-million out-of-court composite settlement. That means that in return for the money, Maximovitch surrenders her right to sue either the company or Murthy.

And while Maximovitch moved out of the picture with the settlement, Phaneesh Murthy and the company have been on a war of words—press releases to be exact—in a case that’s getting unseemly after the resolution.

Charge-counter charge
Announcing the settlement, Infosys chairman NR Narayana Murthy said under the terms of the agreement, Infosys "reserved the right" to take action against Phaneesh for non-participation in the settlement (not paying up any part of $3 million) and for his conduct.

According to Narayana Murthy, Phaneesh did not inform the company about his consensual relationship with Maximovitch, who was his executive assistant from October 1999 to December 2000... nor did he tell the company about two restraining orders she had obtained from the court after she left the company (See box, Timeline). Finally, he informed chief executive officer Nandan Nilekani there was a "possibility of a case being filed" a month after the case had already been filed.

The company sees this as a serious breach of trust.

"I was not guilty, so I didn’t want to participate financially in the settlement"

Despite his relationship with Maximovitch going public, Phaneesh Murthy, on the other hand, has repeatedly claimed innocence. Speaking to Dataquest on the issue, he said: "I was not guilty, so I didn’t want to participate financially in the settlement."

On the contrary, he says Infosys is speaking of a right to take action more in retaliation than anything else. In a statement sent to the media the day Narayana Murthy announced the settlement, Phaneesh said—"Regarding the mention of rights of legal action against me, I feel this is in retaliation to the fact that my lawyers have initiated action to retrieve my vested and paid-for shares which Infosys is withholding, and as a result of which I have suffered significant financial losses."

Infosys denied those charges in a press release sent the next day. Company legal counsel R Nithyanandan said—"Infosys hasn’t received any notice of demand in respect of these shares from Phaneesh and the company is unaware of any lawsuit filed by him in this regard." He also said the company was not singling Phaneesh out. (See box, Murthy v/s Murthy)

Besides, said the legal counsel—"If Phaneesh believed he was innocent and wanted to clear his name, he should have stayed in the lawsuit by himself and defended his position. We had given him this option. Instead of fighting to clear his name, he elected to settle."

And what’s Phaneesh Murthy’s reaction to that—"I agreed to settle because I was not a financial party to the settlement."

Unanswered questions
In the end, the settlement notwithstanding, it’s a story that ends with a lot of questions unanswered from all sides. For one, it isn’t clear why Maximovitch waited a year after leaving the job to file a case. She did obtain two restraining orders between January and July 2001 and said Phaneesh had threatened her boyfriend even after she left the job. But there’re still no clear answers to why she waited six months after the restraining orders to sue the company and Phaneesh.

On Phaneesh Murthy’s side—it isn’t clear why he agreed to settle, though innocent... and then went on to threaten suit against the company that might have helped him get out of what could have been a large financial commitment.

As for Infosys itself—the company was among the first Indian IT companies to declare it had a sexual harassment initiative to prevent just these kinds of incidents. And yet quite obviously, those initiatives and HR practices failed miserably... making it also the first IT company to have ever faced such a suit. So what went wrong? Where was that gaping hole through which $3 million tumbled out?

Some of these questions will never be answered. But the case itself made history of sorts in corporate India. Its settlement comes close to making history in corporate America, where most sexual harassment cases filed by a single defendant are more often settled around $1.5 to $2 billion.

Like we said, what a mess. 

Sarita Rani in Bangalore 
(With inputs from Cyber News Service)