Plaintiffs claim defamation within company caused their terminations from insurance company. $82M. Sacramento County.

Facts and Background

• Facts and Background:

  Zurich Insurance was founded in Switzerland in 1872. The company expanded into North America in 1912 to become a leading provider of commercial property-casualty insurance solutions and services in the U.S. and Canada. A wholly owned subsidiary of the Zurich Insurance Group, Zurich North American Insurance Company offers insurance to 90% of the companies listed as Fortune 500 and is headquartered in Schaumburg, Illinois. Zurich publicly claims that it aspires to be one of the most responsible and impactful businesses in the world.

  Plaintiff Daniel Koos (“Koos”), age 59, started his employment at Zurich Insurance 17 years ago as a claims examiner in San Francisco. On average, Koos was responsible for approximately 150 workers’ compensation claims at a time. In or around 2001, Koos transferred to the Rancho Cordova branch. Koos was promoted to team manager. Koos supervised about five people. At all times prior to termination, Mr. Koos evaluations indicated he was regarded as an outstanding manager and employee.

  In or around 2005, Christopher Omen started working for Zurich as an assistant vice president of the Workers’ Compensation Northwest Region. Mr. Omen supervised approximately 50-70 employees located in three separate offices including San Francisco, Sacramento and Las Vegas. Mr. Omen was one of seven assistant vice presidents managing Zurich workers’ compensation claims in the United States. All assistant vice presidents are supervised by a national vice president, who reports to the “C-suite” of Zurich.

  Plaintiff Nicholas Lardie (“Lardie”), age 57, started his employment at Zurich Insurance as a team manager in the Rancho Cordova branch in 2005. Mr. Lardie’s former supervisor at his previous employer, Christopher Omen, recruited Mr. Lardie to Zurich Insurance. At all times prior to termination,  Mr. Lardie's evaluations indicated he was regarded as an outstanding manager and employee.

  On or around July 11, 2005, plaintiff Melinda Brantley ("Brantley") started her employment at Zurich Insurance as a senior claims examiner. Ms. Brantley’s mother and father both worked as workers' compensation insurance professionals. Ms. Brantley began her career working with her mother at State Compensation Insurance Fund. On or around December 27, 2011, Brantley briefly left her employment at Zurich Insurance to work at another company. In or around December 2012, Brantley returned to Zurich as a senior claims examiner in the Rancho Cordova branch. She returned with full seniority, providing her with the benefits of a seven-year employee rather than a new employee. Her job duties included handling workers’ compensation claims of medium to high exposure for global corporate and middle-market accounts – coverage investigation, determination of liability and damages, reserving payments, benefits notices, and medical treatment. In or around October 2013, Brantley was promoted to workers’ compensation team manager. Brantley was responsible for leading and directing a team of 10 to 12 technical claim professionals in low-to-high exposure claims in worker’s compensation. Brantley’s supervisor was Chris Omen, Assistant Vice President of Workers’ Compensation.

  For three years prior to her termination, Mr. Omen ranked Ms. Brantley as his highest-performing manager. Mr. Omen identified Ms. Brantley as a candidate to become an assistant vice president and went on to say that she would likely become a “C-suite” member one day. At all times prior to termination, Ms. Brantley's evaluations indicated she was regarded as an outstanding team manager and employee.

  For more than a decade Mr. Omen and his team of managers successfully managed thousands of claims filed by injured workers against Fortune 500 employers in the Northwest Region. Mr. Omen and his office were repeatedly ranked in the top tier of the company’s performance metrics. This office led in key performance aspects as well as metrics concerning employee engagement and retention.  Resignations were rare.

  The Rancho Cordova branch of Zurich’s workers’ compensation (“WC”) division included approximately 20-30 line-level WC claims adjusters. These adjusters were managed in three teams led by a team manager for each team. Each team manager was directly supervised by Mr. Chris Omen, Assistant Vice President of Workers’ Compensation Claims from approximately 2004 until October 2017. In addition to the team managers, “team leads” with no subordinates were also directly supervised by Mr. Omen. This same structure applied to the San Francisco office, which was also managed by Mr. Omen. Each office employed approximately 30 WC claims personnel. Mr. Omen was the most senior Zurich employee in charge of both the San Francisco and Rancho Cordova offices since at least 2008. Staff hiring and retention were always critical objectives within the workers’ compensation claims division and in the Northwest Region territory.

  Sometime after becoming assistant vice president (“AVP”) for the Rancho Cordova branch, Mr. Omen utilized “off the record” paid time off (“PTO”) (meaning time taken off work but not entered into the company’s official PTO system, so that “official” PTO balance would not decrease) as an employment perk for employees who put in effort far beyond what was expected of the position to reward hard work and dedication. Mr. Omen also used “off the record” PPT to incentivize prospective employment candidates Mr. Omen wished to recruit. Since Zurich’s amount of PTO scales the longer you are with the company, new hires begin with an entry level amount of PTO (19 days) as compared to employees like plaintiffs working with Zurich for 10-19 years (29 days). Employees leaving other jobs with higher amounts of PTO would be enticed to work with Zurich by Mr. Omen by providing extra “off the record” PTO hours so the employee leaving a job with, for example, 25 PTO days would not experience a reduction of the benefit coming to Zurich’s lower starting PTO benefit. Mr. Omen testified this approach was taken with his boss’s knowledge, support, and encouragement because it was a way to offer better compensation without impacting increasing operational expense.

  Beginning in or about January 2014, Mr. Omen also began using “unofficial PTO” as a performance incentive to reward outstanding conduct of claims adjusters who achieved outstanding individual results. In or about December 2013, at a regional team meeting in San Francisco, the vice president of workers’ compensation, Mr. Peter McCarron, was visiting. Mr. Omen and his team managers from Rancho Cordova and San Francisco were all present. During the course of the meeting, it was discussed that one of the line-level adjusters received an outstanding audit score. Mr. McCarron posed the question of whether there was any way to reward the employee without increasing costs for the company. At that time, it was suggested that “off the record” PTO also be used as a performance reward for adjusters with outstanding audit scores. Again, it was emphasized that this would not actually increase budgeted expense to the company. It was suggested that employees in the “95 club” (audit score of 95 or better) should receive the benefit. Mr. McCarron enthusiastically agreed and encouraged Mr. Omen to use this approach moving forward.

  Moving forward from 2014, Mr. Omen instructed his subordinate managers to provide “off the record” PTO to the “95 club.” Mr. Omen also provided his subordinate managers occasional “off the record” PTO in recognition of their outstanding work. Continuing from approximately 2014 through his termination, Mr. Omen offered “off the record” PTO to employees based on performance, as well as a hiring incentive for prospective employees. Employees in Mr. Omen’s division referred to the “off the record” PTO as “Omen Days.” When an employee used “Omen Days” they were instructed not to use any of Zurich’s official paid time off. Typically, Mr. Omen instructed the employee to “take a day off” or he would delete the time-off requests in the system stating, “It’s on me.” This indicated that the employee earned the time off without reducing available PTO. (Use of “off the record” PTO was not entered into the company’s system and hence would not cause a reduction of the employee’s PTO balance.)

  Management changed over a period of time and there was much jockeying for management positions. Mr. Omen was terminated,  and "off the record PTO" became a stated source of concern to new managers.

  Plaintiffs were fired in December 2017. 

  Within three months all plaintiffs found new jobs for different workers’ compensation insurance companies, but with much lower seniority, benefits and pay.

• Plaintiff's Contentions:

  That plaintiffs were maliciously defamed by certain managers, which caused their terminations. That while the company claimed that plaintiffs “stole” the off-the-record time off from the company, in fact the time off was authorized by Mr. Omen while he was their manager.  Zurich’s agents then falsely contended that even though Mr. Omen did in fact authorize the time off, plaintiffs using their “common sense” “should have known better.”

• Defendant's Contentions:

  That plaintiffs engaged in time theft.

  Defendant Zurich claimed that using “Omen Days” was theft because, even though plaintiffs were authorized to use the time by Mr. Omen and his bosses, plaintiffs as top performing managers should have known better. Further, even though no policy at Zurich forbade “off the record” PTO, plaintiffs’ common sense should have told them it was wrong.