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The mother-of-two was accused of firing Funkhouser because he refused to have sex with her.
Now, 12 years later, Ramsey's campaign says she will announce that she is dropping out on Friday.
The federal lawsuit against Lab One was till pending in April 2006 when Ramsey retired from the company.
Funkhouser said that before he rejected her he got outstanding performance reviews, but that things changed after the March incident.
In July 2006 Lab One and Funkhouser dismissed the case without the possibility of bringing it up again, instead reaching a settlement.