Three former workers at an office of Zurich American Insurance Co. in Northern California were awarded over $80 million in damages by a Sacramento jury after being fired for taking paid time off without officially recording it. The lawsuit was filed in 2018 and went to trial after settlement offers were declined by Zurich American. The plaintiffs were awarded damages for economic harm, reputational damages, and $25 million each in punitive damages. They were fired in December 2017 after they followed a supervisor’s policy of taking “off the record” time off as a reward for hard work.
The employees had been taking “Omen days,” named after then-Assistant Vice President Chris Omen, who offered free paid time off based on performance. This unofficial rewards program did not require any requests or entries in the official PTO system. The employees were instructed not to use any of Zurich’s official paid time off if they used the paid time off approved by Omen. The entire branch was aware of and benefited from this program until the three employees were fired days before Christmas 2017 following a brief investigation by the company.
Zurich American argued that the employees engaged in “time theft” by underreporting paid time off, resulting in them being paid over $100,000 more than they should have been over two years. The company claimed that the employees admitted to underreporting their PTO and justified their actions by saying that their supervisor instructed them to do so. However, the lawyer representing the employees argued that they were unfairly defamed by Zurich American and that his clients did not want to be involved in a lawsuit. Settlement offers made by the lawyer were repeatedly rejected by the company.
The lawyer representing the plaintiffs criticized Zurich American for not taking steps to prevent the situation and for conducting only a brief investigation into the allegations before firing the employees. He expressed concern about how the company’s treatment of its employees might reflect on the way it handles claims from its customers. Despite multiple attempts to settle the case before trial, Zurich American refused to agree to any settlement offers. The significant damages awarded by the Sacramento jury serve as a warning to companies about the potential consequences of unjustly terminating employees.
