Recording Academy & Suspended CEO Deborah Dugan Begin Settlement Negotiations

The two parties entered mediation on Thursday after Dugan was placed on administrative leave on Jan. 16., entered mediation on Thursday to negotiate a settlement, sources tellDugan, who worked as CEO for roughly six months, filed a discrimination complaint with the Equal Employment Opportunity Commission on Jan. 21 against the academy, after she was placed on administrative leave on Jan. 16 -- just 10 days before the 62nd annual Grammy Awards -- amid allegations of workplace bullying.

Dugan and the Recording Academy initially tried to settle their dispute quietly. The Recording Academy alleged that talks broke down after Dugan reportedly asked for $22 million. The academy countered with a multimillion-dollar offer -- around $8 million -- two sources tell, but Dugan turned it down. Talks continued after she was placed on leave, sources say, but no resolution could be found.

"They are definitely trying to mediate it as they probably should have from the beginning to avoid all this," a source tellsIn Dugan's EEOC complaint, she said she sent an email to the academy's managing director Shonda Grant on Dec. 22 alleging sexual harassment, "egregious conflicts of interest, improper self-dealing by Board members and voting irregularities with respect to nominations for Grammy Awards.

"If you are the plaintiff, you are always in control of the destiny of the complaint," George adds. "So if you decide you don't want to pursue the EEOC complaint anymore, you simply just let them know."Additional reporting by Melinda Newman.

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