A federal judge has largely rejected State Farm’s attempt to scuttle a class action accusing the insurer of discriminating against its Black agents.
Seven current and former State Farm agents sued the State Farm’s various corporate identities, alleging a set of practices and policies that result in Black agents earning less than other agents, enduring differential treatment and experiencing greater attrition rates.
In July 2022, U.S. District Judge Franklin Valderrama rejected State Farm’s earlier attempt to dismiss the complaint. Following that ruling, plaintiff Vvonaka Richardson added claims of racial discrimination under the 1964 Civil Rights Ave, and Title VII complaints of sex discrimination, harassment and retaliation.
State Farm argued Richardson, who lives in Alabama, doesn’t have standing to bring the Title VII claims because she didn’t allege a personal legal harm. Richardson alleged State Farm didn’t assign the promised number of customers at the start of her work as a Term Independent Contract Agent, instead assigning those policies to a white agent. She further alleged State Farm wouldn’t extend her 13-month TICA term or make her a full agent, though she said the company did the same for white agents.
Jenkins agreed with Richardson that "State Farm's arguments really are an attempt to narrow her Title VII claims to just two alleged policies." The judge said the complaint adequately alleges racial discrimination with respect to Richardson's office in Mobile and her compensation.
“These discriminatory policies and practices, she claims, harmed her personally, including in the form of lost wages and other benefits,” Lindsay wrote. “While some of these factual allegations are thinner than others, they nonetheless satisfy” minimum pleading requirements.
However, Lindsay agreed with State Farm that the complaint doesn’t adequately allege personal exposure to racially discriminatory discipline. Though Richardson alleged her July 2020 termination was unlawful, Lindsay said that is a legal conclusion, not a factual allegation that must be given the presumption of truth.
“Without the legal conclusion, all that remains is Richardson’s factual allegation that her contract expired,” Lindsay said, agreeing with State Farm that Richardson can’t pursue an injunction or court order because she can’t demonstrate possible exposure to future discrimination by a company for which she no longer works.
Turning to the Title VII disparate impact claim, Jenkins rejected State Farm’s argument to ignore Judge Valderrama’s conclusion the first complaint sufficiently “identified company-wide discriminatory policies” because it was in the context of individual claims. She said the amended complaint pleaded facts connecting corporate policies to the Title VII claim, such as “the policy of assigning Black TICAs and Agents to less wealthy regions than non-Black TICAs and Agents, and implementing a policy of ‘commission-based, cumulative-advantage compensation,’ ” Jenkins wrote. “The descriptions of these policies are not merely conclusory: they identify a policy or practice, one related to territory assignment and the other to State Farm’s compensation structure, and they allege that these policies result in experiences or outcomes not shared by other State Farm employees.”
Jenkins further rejected State Farm’s request to dismiss the Title VII claims as overdue, again agreeing with Valderrama’s earlier reasoning. She also rejected its motion to strike the class allegations. She said that decision cannot come until later in the proceedings in the case, after so-called "class discovery" is conducted to further uncover the facts in the case, such as how common the experiences of Black agents may have been.
Jenkins assigned U.S. Magistrate Judge Sunil Harjani to supervise the discovery and settlement phase.
The Black agents are represented in the matter by attorneys Linda D. Friedman, Suzanne E. Bish and George S. Robot, of the firm of Stowell & Friedman, of Chicago; Justin L. Leinenweber, of Leinenweber Baroni & Daffada,of Chicago; Benjamin L. Crump and Nabeha Shaer, of Ben Crump Law, of Tallahassee, Florida, and Washington, D.C.
State Farm has been represented by attorneys Patricia Brown Holmes, Joseph A. Cancila Jr. and Amy C. Andrews, of the firm of Riley Safer Holmes & Cancila; and Michael A. Warner Jr.,of Franczek P.C., both of Chicago.