Why settle? One reason is the negative publicity sexual harassment cases often draw when they go to court. It’s particularly tempting for employers to settle before litigation has been filed, which results in a public record. Mr. Cain’s National Restaurant Association did just that.

Then too, settling sexual harassment complaints makes good financial sense for employers in light of the lottery-like awarding of punitive and emotional distress damages and unpredictable “severe and pervasive” standard they face in court. In a 1990s California case, a jury awarded an employee of law firm Baker & McKenzie $7 million in punitive damages for sexual harassment despite finding only $50,000 in actual damages.

Defendants who lose sexual harassment cases in court have to pay the plaintiff’s attorney fees—$1.9 million in the Baker McKenzie case—but are rarely awarded attorney fees when they win. Even in the best-case scenario where an employer avoids trial and prevails on summary judgment, the employer will ring up a legal bill of $100,000 or so.