Masterson, who has denied the allegations, is in the midst of an ongoing Los Angeles Police Department investigation into claims by three women that the actor sexually assaulted them in the early 2000's, but he's never been charged.
In a statement at the time of his firing from the show, the actor said he felt persecuted in the current climate of harassment allegations in Hollywood, adding, "In this country, you are presumed innocent until proven guilty. However, in the current climate, it seems as if you are presumed guilty the moment you are accused."
But according to Dan Abrams, Chief Legal Analyst for ABC News, Masterson is misinterpreting the old phrase "innocent until proven guilty."
He added, "That is what applies in a criminal court, when the government has the power to take away your freedom. We intentionally stack the deck in the favor of the defendant to say ‘We’re not gonna put you in jail unless we can prove this really high standard.’”
Abrams said that doesn’t necessarily mean the rest of society, or private companies like Netflix, have to apply the standard of innocent until proven guilty before cutting someone loose.
"The burden of proof is legal diction created for courtrooms," Abrams told ABC News. "Forcing prosecutors to prove their case beyond a reasonable doubt. Anything beyond taking away someone's freedom doesn’t involve burden of proof beyond a reasonable doubt, even employment ... An employer can make a decision where they ask, 'Does it seem more likely than not that this occurred?'"
The person being accused can issue a response, as is their given right, whether it be in civil court or via statement, Abrams said.
"I think the challenge for [someone like Danny Masterson] here is the serial nature of the allegations and the type of allegations," Abrams said about the former "70's Show" actor. "With Masterson ... you are talking allegations of rape – that puts Netflix in a tough spot."
"The law always talks about 1st degree, 2nd degree, etc.," Abrams said. "And these harassment and assault cases will begin to be put into categories too."
Abrams said a person who is accused of touching someone "on the waist during a photo shoot" can't and shouldn't be lumped in with assault and rape. In addition to releasing a statement, Abrams said a person can also threaten to sue if they believed they have been falsely accused.
Larry Hackett, managing partner for 10Ten Media and former managing editor of People magazine, says people think Hollywood is one big company, where everyone knows each other but that's just not the case. In fact, he says it's more like the home building business, in which you have contractors and subcontractors, not just one company involved.
"They get together for these projects and then separate," he told ABC News. "Aside from the big studios, it's basically a bunch of independent contractors."
So with this in mind, a Netflix or network like an HGTV is just buying a finished product or a pitch like "The Ranch" from an independent production company. So when Netflix cuts out someone like Danny Masterson, it's not like they are firing a 15-year employee without cause.
These layers to Hollywood and this new era of uncovering alleged harassment really leave the studios and streaming services in uncharted territory, experts warn.
The shows are just "something they go and do or buy, and yet they are responsible for it," Hackett said. "What are the rules of the investigation, of the evidence, what steps do you take? There is this problem that is longstanding and there is no format to deal with this ... These days aren't like it was decades ago, where these shows and movies are all filmed on the studio lot. They had total control."
So what do companies like Netflix do when a contract employee is rumored to have committed sexual assault?
"I was talking to a source at Netflix and they are trying to get ahead of this," he said. "In fact, they should be doing a little more front-end background checks before they even buy or produce something from now on."
Netflix, which said earlier that Masterson was written out of "The Ranch" as a result of "ongoing discussions" between it and the show's producers, declined to comment further Wednesday evening.
"All of these conversations serve to be checks on the system as this thing explodes around us," Hackett says. "If people or companies have a track record of being open and responsive to harassment claims," then they might not be so quick to cut ties and take longer to investigate. But for now, Hackett says, expect companies to continue to distance themselves from alleged abusers.
The media expert said, "Right now, [the companies] have been seen as being unresponsive" in these cases.
Melissa Silverstein, the founder and editor of the website Women and Hollywood, says she thinks many companies are cleaning house so quickly because there had always been rumors in the workplace, but no real proof and that people have been afraid to speak up until now.
"I wouldn't say they are cutting ties before they actually get complaints," she said. "They look into them. What I think happened was, people heard rumors and rumbling, but they had no real complaints. Nobody spoke up because everybody was afraid. Lots of institutions don't have mechanisms where it's safe for women to report. HR is still a tool of the company and a function to protect the company."
But with the culture of silence and fear breaking down in this current shift, Silverstein says companies are now "getting confirmation on things they might have heard before and are able -- no, must -- respond to it."
This doesn't mean things are all OK now, not by any means. There's still a lot of work to do to make women feel safe and towards equality, she adds.
"The issue is how do companies create a climate where people continue to report, so that women are protected and they can get their work done and they want equal opportunities," she said.
She points to the lack of women in senior management in big corporations and studios that is why this problem is so pervasive within the industry.
"Finally people are saying, 'We have a zero tolerance policy,'" she said.