Labor & Employment

Farmers Insurance to pay $5.8M to settle discrimination suit by female claims litigators

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In a proposed settlement filed late Tuesday, Farmers Insurance Group Inc. agreed to pay $4 million to some 300 women who have worked as claims litigators for the company over the past four to five years.

Farmers will pay an additional $1.8 million in attorney’s fees to settle the pay-discrimination suit, and has agreed to what plaintiffs lawyer Lori Andrus called “robust” reforms in its business practices. These include promoting more female attorneys into better-compensated positions, reports the Recorder (sub. req.). Andrus is to share the attorney’s fees with co-counsel Lori Costanzo.

An independent consultant is to review company policies concerning compensation, performance reviews and promotion and potentially call for changes.

Lead plaintiff Lynne Coates, who worked for Farmers in San Jose, California, alleged that the company put a $100,000 lid on her salary, yet a male colleague was paid between $150,000 and $200,000. When she complained, the company retaliated and demoted her, she contended.

Brought under both state and federal laws guaranteeing equal pay, the suit was to be an early test of California’s Fair Pay Act, which took effect this year.

The settlement must still be OK’d by U.S. District Judge Lucy Koh of the Northern District of California before it is final.

Farmers, which was represented by Paul Hastings in the suit, declined to comment.

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