Danker was dismissed last year following an investigation over his conduct towards a female employee who accused him of making unwanted comments that she considered sexual harassment.
He was also criticised for inviting young female employees to solo breakfast meetings and commenting on social media posts.
Danker's dismissal came as separate allegations were made against the CBI, for a toxic culture and widespread sexual misconduct. More than a dozen women alleged sexual assault.
In a BBC broadcast after his dismissal, Danker argued that his name had been unfairly associated with these complaints and that he had been made a ‘fall guy’.
A CBI spokesperson said on Monday: “The CBI has today settled legal action brought against the organisation by Tony Danker after his dismissal in April 2023.
“The CBI board has agreed an undisclosed settlement with Mr Danker.
“The CBI board also reiterates that Mr Danker is not associated in any way with the historical allegations reported in the media concerning matters which pre-date his tenure at the CBI and rejects any such association.”
Read more: CBI boss sacked over misconduct claims
Paul Kelly, head of the employment team at Blacks Solicitors, said that employers should be careful to follow due process when dismissing an employee.
He told HR magazine: “An employer must take great care when deciding whether the employee’s actions justify disciplinary action. Matters should be thoroughly investigated and recorded, irrespective of outside pressure, such as media attention.
“Employers should take the time to ensure that they follow the correct disciplinary procedure and arrive at the correct outcome.
“As with this case, employers need to be mindful that if they pre-judge matters and don’t follow a fair disciplinary procedure, they could expose themselves to legal proceedings, an award of compensation and reputational damage, and adverse publicity that is potentially worse than what they were originally trying to avoid.”
Michelle Last, solicitor at Keystone Law, said that employers must also seek to maintain confidentiality where possible.
Speaking to HR magazine, she said: "An employer is legally obliged to protect the confidentiality and personal data of both the alleged victim and perpetrator. Therefore, it may often not be appropriate to comment on an ongoing investigation at all. If the matter does become public and the employer is compelled to make a comment, the employer may wish to simply state that it must maintain confidentiality but can confirm that all allegations are being properly investigated.
“The victim is not always even entitled to know the outcome, because of the obligation to protect the alleged perpetrator’s personal information. Ultimately, if the alleged perpetrator is dismissed then takes legal action, the truth may come out. However, a confidential settlement means the truth is often kept secret.”
Read more: CBI sexual misconduct scandal comes as no surprise to HR professionals
