What could I do if I have been stressed by my employers decision?

I am a Site Manager for a large company. I have been employed with them for almost 5 years. I have been in a Managerial role for almost 20 years. In October of last year we had a new team member hired on, by middle of January 2014 she had filed a law suit against the company for wrongful termination while she was still employed and filed Harassment against one of the existing team members. She had also made allegations of reporting the harassment to me numerous times and nothing was ever done. This launched a huge investigation with the company’s HR and Security department that lasted a few weeks; it was something that I had never been through before. The outcome was that all accusations and allegations that were made had no validity to them, none of them turned out to be true and basically she was removed from the site. Back to everyday business for everyone. A few days ago I was contacted by the HR department my boss and Area Ops Manager and asked for the team member that the allegations were made against to be removed from the site with pay and that the individual that made all the false claims was to return to the site. The company’s legal department has made this call and the only sense that I am making out of it is that they are afraid of the lawsuit? Why is there a legal department anyway? None of the team members that currently work there are comfortable with the decision to bring back this individual and I am scared that I will not be able to perform my job adequately. It is a very stressful situation, I have not been able to sleep properly for the last couple of days and I am not too sure what my options are? I do not want to be there with this person.