July 3, 2022

Volume XII, Number 184

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July 01, 2022

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Los Angeles Jury Hands $155 Million Holiday Gift to Fired Insurance Executive

As we recently reported, California juries continue to award massive verdicts to employees with alarming regularity.  And, just in time for the holidays, a Los Angeles Superior Court jury upped the ante on Thursday, handing a fired insurance company executive a verdict totaling $155.4 million – including $150 million in punitive damages.

Plaintiff Andrew Rudnicki worked for Farmers Insurance Exchange as a senior executive and lawyer in its Claims Litigation division.  Farmers claimed it terminated Rudnicki’s employment after he made sexist and inappropriate remarks (e.g., using terms like “girlish figure” and “lesbian quota”); failed to escalate concerns raised by female employees about underrepresentation of women in management roles; and did not respond appropriately to one of his reports’ failure to adhere to document preservation protocols.  For his part, Rudnicki claimed his termination was discriminatory based on his age, gender, and disability, and in retaliation for his participation in the investigation and defense of a pay equity class action against Farmers, which ultimately settled for over $4 million.

While Farmers successfully secured summary adjudication on a number of Rudnicki’s claims, several causes of action remained for the jury to decide.  And, although they unanimously rejected Rudnicki’s discrimination allegations, the jury found in his favor on his retaliation allegations, awarding him $5.4 million in compensatory damages, including $4.4 million for lost past and future wages and $1 million for emotional distress (he testified that he experienced “shock, depression, and embarrassment” over the termination and that he “endured fitful sleep and a loss of appetite for at least three or four months”).

Not to be outdone by the San Francisco jury that recently awarded $130 million in punitive damages against Tesla to a short-term employee, the Los Angeles jury in this case assessed $150 million in punitive damages against Farmers.

Fast math:  That is almost a sixth of a billion dollars for the firing of one person!

Setting aside the likelihood that this unconstitutionally high punitive damages award will be reduced through post-trial motions or on appeal, this verdict is just another example of the very real dangers that await those employers who blithely trust their fate to a California jury and further proves what we have preached time and again. There is only one way for California employers to insulate themselves from such catastrophes:  Arbitration, arbitration, arbitration!

© 2022 Proskauer Rose LLP. National Law Review, Volume XI, Number 351
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About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm
Partner

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

310-284-5690
Phillipe Lebel labor & Employment Attorney Los Angeles Proskauer Law Firm
Associate

Philippe (Phil) A. Lebel represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, whistleblower, trade secrets, and breach of contract litigation, in both the single-plaintiff and class-action context, at both the trial and appellate level, and before administrative agencies. Phil also represents employers in connection with labor law matters, such as labor arbitrations and proceedings before the National Labor Relations Board. Additionally, Phil counsels clients to ensure compliance with federal...

+1.310.284.4558
Law Clerk

Morgan Peterson is a law clerk in the Labor Department and a member of the Employment Litigation & Arbitration Group.

310-557-5617
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