STETSON – A former town clerk’s claims of sexual harassment, discrimination and wrongful termination by selectmen was settled for $45,000.

In a lawsuit settled out of court in late October, the town’s Board of Selectmen agreed to cut two checks – one to former town clerk Corinne Babcock for $26,575 and the second for $18,425 to her attorney, David Webbert of Johnson & Webbert LLP.

At the Nov. 14 board meeting, selectmen approved an accounts payable warrant that included a $2,500 deductible for insurance to the Maine Municipal Association, head selectman George Hockstadter confirmed last week. Hockstadter confirmed Tuesday that only the $2,500 deductible would be drawn from town coffers and the remaining amount would be covered through the town’s MMA insurance policy.

The Bangor Daily News received a copy of the settlement agreement in the mail after requesting the document through the Freedom of Access Act.

Babcock filed the lawsuit Feb. 7 in U.S. District Court in Bangor alleging that Hockstadter threatened to spank her if she did not do as he directed in the office, and he told her she would be a “sex goddess” if she lost 50 pounds. He also referred to her using demeaning terms, such as “little girl” and “porky.”

Babcock was abruptly fired Jan. 8 without just cause and without a hearing, according to the lawsuit. Then-head selectman David Buchstaber told Babcock that she should resign, or “you won’t like what we will put you through and you will get fired anyway,” the lawsuit read.

The same week Babcock was fired, selectmen asked Penobscot County Sheriff Glenn Ross to be present while a consultant reviewed the town books. After examination, approximately $150,000 in town funds had been inappropriately recorded, and 31 checks previously thought to be missing were found voided in an office file.

In the lawsuit, Babcock sought to be reinstated with back pay, benefits, compensatory damages and attorney fees.

The settlement amount was given to Babcock for the loss of enjoyment of life and injury to reputation, and not for back or future wages or punitive damages, according to the settlement. The town denies the allegations and agreed to issue a neutral letter of reference to Babcock’s perspective employers.

Babcock signed the agreement on Oct. 5, while Hockstadter and Selectman Gerald Button, who represented the town, signed off on Oct. 24.

Michael Starn, spokesman for MMA, said he didn’t want to speculate on Stetson’s insurance premium for next year, but he did say that generally claims make premiums rise.

“With any type of insurance that you have with industry or business or municipal there is a claims experience that gets factored into future premiums to some degree,” said Starn.