Sexual Harassment Took Place While Employers Were Out of Country

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uswlooi

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We have a lawsuit filed against us for a sexual harassment case that took place between a female and a male employees while we (husband & wife employers) were out of country. The female employee informed us of the encroachment upon her privay by the male employee via e-mail and since we couldn't fly back to the States immediately, we did what we could such as ask her to take time off or take early resignation (as she had earlier gave us two month notice) but she declined cos' she didn't want to loose the income.

She continued to work, but a few days later, events took a different turn. She left the work and reported to police. The male was subsequently arrested but was later released after he admitted to his wrongdoings.

Now, the female employee is suing us for sexual harassment by the male employee and hostile working environment. Actually, there are more details which we left out for the sake of brevity, but our main purpose is to seek advice from some kind souls from this forum on how we, as employers can find an amicable solution to the case since we don't think we have the financial means to take on the case even tho we feel strongly that we could win the case.

The plaintiff is asking for $110K for out of court settlement failing which, she will file a lawsuit against us, the male employee and company. Our company is a S-corp incorporated in California but our business hasn't been doing well for the past 1 year. Our liqudated cash is less than 15K in the bank and the company is on the brink of closing down.

Please let us know what would be the best solution to our dilemma without incurring any legal cost, if there is any, will be very mimimal.

If we're unable to afford an attorney, can we represent ourselves in court? If we lose the case and don't have the liqudated cash to pay, what would happen?

Thank you.
 
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