Stacy Brown began working as an insurance agent for NationalPenn in 2002. In 2008, her department underwent a reorganizationresulting in a change to her responsibilities (but not hercompensation) and a move from a private to a shared office. Upsetby those changes, Brown met with her manager, Maryanne Broemal, toask why she was being moved without advance notice and to complainthat the reorganization “was unfair.” At that meeting, Brownalleged, Broemal told her that National Penn believed its largerclients—who were shifted to a different group within Brown'sdepartment as part of the reorganization—would prefer to deal witha male agent. Broemal denied making that statement.

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Around the same time, Brown was growing dissatisfied with thework David Ferrier, a contractor and National Penn customer, hadbeen performing on her house over the previous few years. AfterFerrier unsuccessfully tried to rectify the problems with the work,Brown decided to file an insurance claim with National Penn. Beforedoing so, she asked Broemal whether she could “put a claim in” forthe damage and whether doing so would “jeopardize [her] job.” Shedid not, however, tell Broemal that she intended to accessFerrier's confidential account information to file a claim on herown behalf without following normal procedures for filing claims.Accordingly, Broemal told Brown that filing the claim would notplace her employment in jeopardy. After a similar conversation withanother employee, Brown used National Penn's computer system toaccess and obtain Ferrier's information and file a claim for thedamage to her house.

Days later, Ferrier contacted National Penn to complain thatBrown had acted unethically in using his confidential informationto file a claim without his knowledge and without followingstandard claim-filing procedures. After investigating Ferrier'scomplaint, National Penn determined that Brown had violated thecompany's code of conduct—which instructed employees to avoidconflicts of interest and self-dealing transactions and prohibitedthe use of confidential information “except for the proper conductof the business of” National Penn—and terminated her employment inlate 2008. At the time she was terminated, Brown was two weeks pastdue to receive her annual performance review and salaryincrease.

Brown sued National Penn in the U.S. District Court for theEastern District of Pennsylvania, alleging gender discriminationand retaliation under both Title VII of the Civil Rights Act of1964.

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No proof of discrimination

The district court held that Brown failed to state a primafacie claim of discrimination. To demonstrate genderdiscrimination, Brown needed to show that:

(1) She belonged to a protected class;

(2) She was performing adequately;

(3) She suffered an adverse employment action; and

(4) The action took place under circumstances suggestingdiscrimination.

Although Brown's termination and perhaps the delay in herperformance evaluation and expected raise constituted adverseemployment actions, the trial court ruled for the employer becauseshe failed to provide any evidence indicating that National Penntook those actions under circumstances suggestingdiscrimination.

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Brown's discrimination argument was unpersuasive because therecord showed that she was fired for taking advantage of herposition by obtaining and using confidential customer informationfor her own benefit, an action that violated National Penn's codeof conduct. Brown offered no examples of male coworkers beingtreated differently and drew no logical connection between herfiring and Broemal's alleged comment about larger clientspreferring male agents. Brown pointed to no record evidenceindicating that her termination was because of her gender.

The district court also held that Brown failed to provide anyevidence of retaliation. To prove her case, Brown was required toshow that:

(1) she was engaged in protected activity

(2) she was discharged subsequent to or contemporaneously withsuch activity

(3) there was a causal link between the protected activity andthe discharge.

The district court held that Brown failed to show that sheengaged in a protected activity because she complained only ofunfairness.

(Photo: Shutterstock.com)

Distorting the record

Brown appealed and the U.S. Court of Appeals for the ThirdCircuit reviewed her claims in Brown v. National Penn Ins. Services GroupInc. On appeal, the court said, Brown attempted to distortthe record, arguing that within three weeks of Brown's complaintduring her conversation with Broemal about unfairness aboutNational Penn's gender-based decision-making, Brown wasterminated. But she provided no citation to the record in supportof this characterization, and the court's independent review of therecord led it to conclude that she did not complain aboutgender-based decision-making during her meeting with Broemal.Instead, Brown herself stated that she complained only that thereorganization, including her move to a shared office, “wasunfair.” Such a generic complaint does not qualify as protectedactivity, so Brown's case failed.

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Insurance agents and brokers, like Brown, must keep the recordsand information about the clients sacrosanct. Brown, withoutauthority, did the opposite. By violating the insurer's code ofconduct, which instructed employees to avoid conflicts of interestand self-dealing transactions and prohibited the use ofconfidential information “except for the proper conduct of thebusiness of” National Penn, she was terminated. The court wasconvinced that she was terminated solely because of her breach ofthe code of conduct.

Barry Zalma, Esq., CFE, is a California attorney, insuranceconsultant and expert witness specializing in insurance coverage,claims handling, bad faith and fraud. Contact him at [email protected].