CalFarm Nationwide Insurance has been ordered to pay $2.6 million to a former Sacramento resident after a jury found the company guilty of allegedly deceiving the man into relocating to California to take on a position, only to fire him five short months later, according to the Sacramento Bee.
Roger D. Mullins, 50, sued CalFarm after he accepted a position with the company in 1999, and was laid off due to the sale of CalFarm to Nationwide Insurance, who subsequently cut jobs.
Mullins alleged that while in interviews with CalFarm’s parent company, Zenith Corporation, executives failed to disclose the impending sale.
After his acceptance of the position, Mullin’s quit his job in Delaware and sold his home to relocate to California. The $300 million sale to Nationwide was announced on Mullin’s first day on the job.
Mullins argued that he asked CalFarm recruiter Keith Klein and executive vice president of claims Franklin Adams if there was the possibility of an impending sale or merger before he accepted the position as assistant vice president of property damage.
Both Klein and Adams reportedly assured him his job was secure, even in subsequent weeks after the sale was announced.
In June of 1999, Nationwide and its subsidiary Allied Insurance eliminated Mullins’ position as a result of the sale, according to legal documents.
The company offered him positions of different tasks and more than a 40 percent salary cut, which Mullins declined. He was then terminated in July of 1999. Christopher H. Whelan, Mullin’s attorney, pointed out that many companies don’t give employees enough consideration when in the process of a sale or merger- especially to those come in and out if state. Whelan further stated that relocating employees are most vulnerable because of their lack of connections to the company.
The Sacramento Bee further reported that the suit refers to a deposition in which Adams revealed a reported conspiracy by top officers from Nationwide, Zenith, CalFarm and Allied in January of 1999 to withhold information from Mullins regarding the imminent sale during the hiring process.
Other witnesses claimed Mullins was not told of the impending sale because he was not an employee at the time.
The jury found that CalFarm had reportedly violated a 99-year-old state labor code that prohibits persuasion of potential employees to come to California for work without disclosing terms, conditions, or length of employment.
Any company found in violation of the law is automatically liable for double penalties.
Half Moon Bay attorney Donald E. Cope would not comment on behalf of CalFarm Nationwide. It is no known if the company plans to appeal.
Mullins returned to Delaware in 1999 where his wife, Rose, continued to work with J.P. Morgan Chase Bank in Pennsylvania through the CalFarm uncertainty.
The company reimbursed the $13,000 deposit Mullins had put down on a house in Sacramento, as well as for his relocation back to Delaware, according to Whelan.
Topics California Delaware
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