The town's insurance will cover the full $225,000 settlement that ends former Youth Services Director William Fahey's wrongful termination lawsuit against Andover, the Select Board announced Wednesday, July 15, 2026. The payment will not come from the general fund and carries no direct financial impact on taxpayers, according to the board's written statement.

Town Manager Andrew Flanagan characterized the outcome as favorable, noting the $225,000 represents 2.25% of the $10 million Fahey originally sought when he sued Flanagan and the town in the summer of 2021.

The settlement cancels a multi-week jury trial that had been scheduled to begin Monday, July 27, in Essex Superior Court in Lawrence. It includes no admission of wrongdoing by either party.

Fahey served as Andover's Youth Services director for 27 years, from 1994 until his termination in May 2021. The firing followed allegations by a woman identified in court records as "MJ," who accused Fahey of inappropriate conduct after meeting him through the youth services program as a teenager.

The Essex County District Attorney's Office determined the alleged conduct did not constitute a criminal offense, even if the allegations were true, according to court filings.

The town hired an outside investigator, Discrimination and Harassment Solutions LLC, to examine the claims. That investigation found concerns about the accuser's credibility, including inconsistent statements and memory issues, but also identified "significant gaps" in Fahey's credibility. The investigator concluded there was sufficient evidence Fahey violated the town's computer-use policy and sexual harassment policy, and recommended disciplinary action.

Flanagan terminated Fahey in May 2021. Fahey sued months later, alleging wrongful termination and defamation, claiming the town acted in bad faith and that Flanagan damaged his reputation through communications with the Select Board and the public.

In August 2025, Judge Elizabeth Dunigan denied a summary judgment motion by Flanagan, sending the case to a jury. Then in April 2026, Judge Matthew Nestor excluded two of Fahey's expert witnesses, finding neither offered reliable methodology. That ruling weakened Fahey's trial position weeks before settlement talks began.

The Select Board held at least three executive sessions in the weeks before the announcement, on June 29, July 2, and July 8, to discuss litigation strategy under the Massachusetts Open Meeting Law exemption. A fourth session on Tuesday, July 14, 2026, preceded the public announcement.

The board said Fahey's attorney, Daniel Murphy, initiated settlement discussions. After weighing the expense and time of a multi-week trial, the board determined that resolving the case served the community's interests.

As of Wednesday, July 16, 2026, Murphy had not responded to a request for comment from Andover News.