Insurance group seeks to dodge $10M damages award to worker who sued HR company over racial bias
An insurance company has asked a Virginia federal judge to rule that it does not have to pay out $10 million in punitive damages awarded to an employee who sued her company for racial discrimination. (Image from Shutterstock)
An insurance company has asked a Virginia federal judge to rule that it does not have to pay out $10 million in punitive damages awarded to an employee who sued her company for racial discrimination.
The Twin City Fire Insurance Co. in a July 28 complaint asked the U.S. District Court for the Eastern District of Virginia to rule that it doesn’t have to pay a $10 million punitive damages award to the employee, who sued a human resources management company over racial bias.
On Tuesday, the insurance company, which is a subsidiary of the Hartford Insurance Group Inc., filed a petition for a declaratory judgment stating that it was not obligated to pay out the damages award.
Jurors had originally awarded employee Rehab Mohamed $11.5 million in December after finding that her employer, the Society for Human Resources Management, racially discriminated against her because of her Black and Egyptian heritage. A few months later, in April, U.S. District Judge Gordon Gallagher of the District of Colorado declined to set aside the award.
According to Law360, the Twin City Fire Insurance Co. has claimed that under Virginia law, the Society for Human Resources Management’s insurance policy does not cover punitive damages based on “intentional acts.”
“The punitive damages award was not, therefore, the result of negligence, gross negligence or any other nonintentional conduct causing a mere ‘disparate impact’ as reflected in the jury instructions and final verdict form,” the insurer said, according to Law360. “The jury awarded punitive damages based solely on its determination that SHRM’s conduct was intentional.”
A spokesperson for the Society for Human Resources Management told Law360 that it is “confident in our position and expect the insurer to honor its contractual obligations.” He also called the underlying claims “without merit.”
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