Unique Payment Option Highlights $32.5M MetLife Race Bias Pact

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By Patrick Dorrian

A class of black former MetLife financial services representatives will have their choice of two different payment methods under a $32.5 million settlement of their race bias claims against the global insurance provider, their lawyer told Bloomberg BNA ( Creighton v. Metro. Life Ins. Co. , S.D.N.Y., No. 1:15-cv-08321, letter filed 7/5/17 ).

The unique approach to the distribution of a class settlement fund permits class members to pick a quicker, more traditional payment calculated based on their years with Metropolitan Life Insurance Co. or its subsidiary, New England Life Insurance Co., and their length of service in the industry overall, attorney Linda D. Friedman said July 6. Alternatively, they can choose a longer individual claims process that also takes into account additional factors, including the alleged discrimination the class member faced personally and how it affected him or her in terms of career or reputational harm, Friedman said.

There are two advantages to the latter option, Friedman said. First, it can lead to a more equitable monetary award for the class member, as the harm someone experiences as a result of workplace discrimination depends on more than just how long they worked for a particular employer or in a particular industry. Second, because of the personal nature of discrimination, it also provides “more procedural justice,” she said.

“It’s a more thoughtful process” that involves the class member presenting evidence of his or her personal circumstances before one or more “neutral” hearing officers who will decide how much of the $32.5 million settlement fund should be paid to the person, she said.

In court, employees claiming job bias get to tell a jury what they went through. The alternative claims process set forth in the settlement agreement with MetLife gives class members who choose to do so a similar chance to recount their story, Friedman said.

Her firm—Chicago-based Stowell & Friedman Ltd.—included similar provisions in an earlier class settlement involving a different financial services company, she said. The class members in that case who chose the individualized claims route “thought they got tremendous value” out of the procedural justice and opportunity to tell their story, Friedman said.

So far, to her knowledge, she said, no one else has structured a discrimination class settlement in this way.

MetLife didn’t admit to any liability under the settlement, according to the agreement. Class members will be required to sign a broad release of their legal claims as a precondition to sharing in the settlement fund.

“At MetLife, we are committed to promoting a diverse and inclusive workplace and do not condone discrimination,” Kim Friedman, a company spokesperson, said in a July 6 email to Bloomberg BNA. “We are pleased that our effort to work together with some of our former Financial Services Representatives to find a resolution was successful.”

Pact Gets Final Blessing

The settlement provides relief to all black financial services representatives who worked for or were affiliated with Metropolitan Life Insurance Co. or New England Life at any time between May 15, 2011, and July 1, 2016.

The class alleged that MetLife and New England Life discriminated against black financial services representatives in the distribution of customer accounts and teaming opportunities. Those practices resulted in black representatives being paid less than their white counterparts based on race, the class asserted.

The lawsuit was spurred by a discrimination charge filed with the Equal Employment Opportunity Commission by lead plaintiff Marcus Creighton in May 2015.

Judge William H. Pauley III of the U.S. District Court for the Southern District of New York gave his final blessing to the settlement June 27. That followed a June 21 hearing before the court.

Pauley ordered separate awards for Creighton and the other six named plaintiffs to compensate them for their services in representing the class. Those amounts—$75,000 to Creighton and $50,000 to each of the others—are to be paid from the class fund.

Unlike some judges, Pauley generally doesn’t make such service awards, Linda D. Friedman said. At the June 21 hearing, he indicated that he was moved to make an exception in this case because of the “considerable effort” made on behalf of the class by each class representative. He also cited the fact that in making such an effort, the class representatives each needed to “come forward and subject themselves to public scrutiny,” potentially adversely affecting their future job prospects in the financial industry, according to a hearing transcript.

The court also determined that $7.15 million of the settlement fund should be set aside for payment of class counsel’s legal fees and expenses. Of that amount, counsel will receive half—$3.575 million—as payment of attorneys’ fees to date and an additional $78,870 for accrued court costs. The remainder of the fees-and-costs set aside will be paid to counsel as Pauley sees fit through what promises to be a time- and labor-intensive class-claims-processing period.

At the June 21 hearing, the judge indicated that class counsel has “performed exceptional work throughout” and that the $32.5 million settlement amount topped the highest similar settlement in 2016 by more than $10 million.

More Class Notice Time Sought

Friedman filed a letter with the court July 5 asking for more time to get word out about the court’s final approval—and the time for filing a “simple,” traditional claim form or the “detailed” form required to participate in the individualized claims process—to the nearly 700 black financial services representatives entitled or potentially entitled to share in the settlement. The final class size is expected to be somewhere between 650 and 690, she said.

A court order indicating that final notice of the settlement had to be mailed to potential class members by July 6 miscounted the days and didn’t account for the July 4 holiday, the letter says. The correct date should be July 12, and the full period is needed to make sure all interested workers are alerted, the letter said.

The incorrect notice date was a simple mistake, Friedman said. She told Bloomberg BNA she doesn’t expect the court to have any concern with changing it to July 12.

Suzanne E. Bish and George S. Robot of Stowell & Friedman also represented the class. Steven J. Pearlman in Chicago and Keisha-Ann G. Gray in New York, both of Proskauer Rose LLP, represented MetLife.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

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