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A federal jury recently awarded four former employees of Allstate Insurance $27.1 million in a defamation and wrongful termination suit against their employer. The award constitutes the largest verdict ever handed down in an employment defamation lawsuit in Illinois history. Previously, the largest defamation award in Illinois was $18.6 million in a 2003 federal lawsuit.
The plaintiffs worked in the equity division based at Allstate’s corporate headquarters in Northbrook, Illinois. Responsibilities of the division included managing equity portfolios for Allstate’s pension plans and casualty and property insurance businesses.
The four plaintiffs in the case were accused by Allstate in a 2010 memo sent to over 350 employees of violating the company’s conflict-of-interest policy by timing trades in order to inflate their bonuses. According to the plaintiffs, their trading policies followed a practice set by high-ranking company executives within the company.
Furthermore, Allstate reported the alleged violations to the Securities and Exchange Commission (SEC), which had severe repercussions on the plaintiffs’ careers. According to the suit, the plaintiffs have been out of work for six years. Because Allstate claimed to have fired the plaintiffs with cause, it meant they were ineligible for severance pay, making the verdict all the more significant for them.
Defendants accused of violating Fair Credit Reporting Act
The crux of the suit was based on Allstate’s annual 10-k filing with the SEC in which it disclosed the internal company investigation into the alleged ethics violations and trading improprieties. What landed Allstate into legal trouble was the plaintiff’s’ assertion the memo and 10-k filing constituted defamation and was a violation of the Fair Credit Reporting Act because the documents were filed without copies of the investigation being made available to the plaintiffs.
Each of the plaintiffs was awarded $1,000 in damages under the Fair Credit Reporting Act in addition to millions in compensatory and punitive damages for the defamation allegations. Allstate closed its equity division in 2010 and outsourced the duties to Goldman Sachs.
Chicago employment attorneys
If you believe you were wrongfully terminated or retaliated against, contact us online or call 312.332.6733 a consultation about your case. State and federal employment laws give employees protections against wrongful termination and retaliation and give them legal avenues to recover for damages. With over 25 years of experience, the Chicago employment attorneys of Goldman & Ehrlich understand what it takes to get clients the justice they deserve.