Female attorneys employed by Farmers Insurance Co. filed suit alleging that the company paid them less than the male attorneys employed by the company. The pay discrimination class action group reached a $4.1 million deal with the insurance company in California federal court. The settlement amount is to be split amongst 300 women who either are or were employed by Farmers as attorneys working as claims litigators throughout the past 4-5 years. The agreement requires that Farmers Insurance Co. hire an outside human resources professional to consult on an independent basis.

Also as a part of the resolution of the case, Farmers agrees to a three-year injunction that sets down a new set of rules for treating female employees. In addition to hiring the independent human resources consultant, Farmers will be required to abide by the rules set down in the injunction. The rules include a requirement to allow attorney employees to openly discuss their pay rates with one another, the conducting of a statistical analysis of pay rates each year, strive to promote more female lawyers in the company, move more women employees into higher pay grades, etc.

The lead plaintiff, Lynne Coates, alleged that a male colleague handling a similar workload and job duties was paid from $150,000-200,000. In comparison Coates’ salary was capped at $100,000. When Coates lodged a complaint, she was “demoted” from her position in the company as an attorney and asked to handle other, lesser duties.

The suit was filed in April of 2015. It involved both federal and California state equal-pay laws. It was also among the first of this type of suit to test California’s new Fair Pay Act (effective 2016). The settlement discussed and agreed on between the parties is still waiting for approval from the U.S. District Judge Lucy Koh of the Northern District of California with a June 23rd hearing already scheduled.

If you have questions regarding pay discrimination or California’s state equal-pay laws, please get in touch with the experienced southern California employment law attorneys at Blumenthal, Nordrehaug and Bhowmik.