Ex-Farmers Legal Chief Fired Over Bias Suit Awarded $155M

Ex-Farmers Legal Chief Fired Over Bias Suit Awarded $155M

A California state jury awarded a former head of Farmers Insurance’s in-house legal services $150 million in punitive damages, in addition to his $5.4 million compensatory damages, after finding that his role as a potential witness in a settled sex bias suit from female Farmer’s attorneys motivated his firing.

On Dec. 14th the state jury found that Andrew Rudnicki, who was fired “right after” a $4.1 million 2016 settlement with a class of female Farmer’s attorneys, was wrongfully terminated, awarded him $3.4 million for past economic loss, $1 million for non-economic loss. On Thursday, the jury returned to find that Farmers Insurance Exchange and Farmers Group Inc. each owe Rudnicki, who worked for the company for nearly 37 years, $75 million in punitive damages.

At the time of his termination in 2016, Rudnicki was a senior vice president, running the in-house branch legal offices, overseeing more than 58 offices, 500 attorneys, and 350 staff members around the U.S., according to his suit.

The jury unanimously rejected Rudnicki's claims that he was fired for his age or for his disability — a heart condition — but 10 of the 12 jurors did find that his "role as a witness or a potential witness" in the California federal court class action was a "substantial motivating reason for defendants' decision to discharge" him.

The operative complaint is heavily redacted, so the specifics of Rudnicki's allegations in relation to the 2015 class action and the company's alleged response are unclear.

In the federal class action, Lynne Coates and a handful of other lawyers had accused the company of violating the Equal Pay Act amendment to the Fair Labor Standards Act by discriminating against female attorneys by paying them and promoting them less than their equally qualified male counterparts doing the same work, and retaliating against women who complained, court records show.

Coates, who worked in the company's San Jose, California, office, said the insurance company has a culture of paying female attorneys less and putting them on a slower career track than their male counterparts. Farmers retaliated against Coates by stripping her of her duties, effectively demoting her when she brought up the disparities, according to her complaint.

In April 2016, Farmers reached a $4.1 million deal with about 300 female attorneys who worked in Farmers' claims litigation group. It also agreed to a three-year injunction requiring it to follow a new set of rules for the way it treats its female employees, including hiring an independent human resources consultant, allowing attorney employees to discuss pay with one another and conducting an annual statistical analysis to determine whether its compensation practices are negatively affecting its female attorneys.

In Rudnicki's operative complaint, he says that claims that women made less than men in the department "simply was not true."

"Not only was Rudnicki not discriminating against women, but, in fact, he spent the majority of his career promoting women into higher level and supervisory positions," the complaint alleges. "When he became vice president, there were only six female attorneys in management in the department. By 2016, that number had increased to approximately 26 female attorneys in management." He also noted that he did not have sole oversight over worker salaries.

"Defendants falsely informed individuals other than plaintiff that plaintiff had discriminated against women, sexually harassed a woman, and made an offensive joke about lesbians," the complaint also noted.

The decision to award punitive damages was not unanimous, with the jury voting 9 to 3 in favor of both $75 million awards.

"It's unfortunate that the retaliation at issue — for giving truthful deposition testimony in another civil rights matter against Farmers — occurred near the highest levels of corporate officers at Farmers," Shegerian said. "But that is what ended our client's previously unblemished 36-and-three-quarters years for these defendants. And the numerous manufactured false reasons Farmers then gave to cover up the illegality only compounded the damage to our client."

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