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August 28, 2003


The opinion of the court was delivered by: James Zagel, District Judge


This is a sex discrimination action brought under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. by Brenda Palmer, both individually and on behalf of others similarly situated. Ms. Palmer moves for class certification pursuant to Fed.R.Civ.P. 23 ("Rule 23").


A. General

The factual background of this case has been detailed in my prior opinion denying defendant Combined Insurance Company of America's ("Combined") motion to strike Palmer's class allegations dated February 24, 2003, part of which I will reiterate here:

Combined is an insurance company specializing in health, accident and life insurance products sold throughout the United States. These insurance products are sold by sales agents spanning the country who are overseen by managers, who are themselves supervised by a higher level of management. Combined is one of the last (if not the very last) vestiges of the "door-to-door" salesmen variety of insurance selling. These salesmen do not work in an office; rather, they work on their own and control their working conditions and schedules, meeting with and [ Page 2]
contacting clients at their homes or in restaurants and other public places. They work solely on a commission basis and receive no salary from Combined.
In Combined, there are twelve separate sales divisions, each managed by a divisional manager. Each sales territory is divided into regions, which are supervised by regional managers. Each region is divided into sub-regions, subregions into districts and districts into territories, and these units are managed by sub-regional managers, district managers and territorial managers, respectively. Divisional and regional managers and the sales agents whom they oversee regularly attend large, multi-day sales meetings known as "Ardmores."
Combined operates on a strict pyramid system in which nearly every manager must advance from within, and almost every top manager (including the chief executive) started as a sales agent (the lowest level) and worked his way up through the pyramid system. Its founder, W. Clement Stone, established the principle that a strictly-commission sales force must be motivated emotionally as well as financially, and that principle remains ingrained in Combined's philosophy today.
Ms. Palmer's allegations can be summed up as the following: (1) Combined's managers give female employees inferior sales opportunities and diminished prospects for success; (2) Combined gives fewer promotions to women than men; (3) female employees at Combined are sexually harassed on a regular basis; (4) Combined provides female employees with inferior training; and (5) even though Combined knows that all of these things are occurring, no effective steps to stop the behavior are taken.

B. Compensation

Ms. Palmer claims that during the relevant time period, between 1998 and 2001, Combined paid women significantly less than their male counterparts by giving women far fewer dollars in premium to work in the field than men. For sales agents and managers at Combined, earnings tie directly to the number of insurance products sold. Every week, an agent is assigned to work in a specific territory, and one source of business in that territory is the lead and referral [ Page 3]

cards given to the agent on a weekly basis by the district manager. This constitutes the "premium worked." Agents are required to call on the clients identified on these cards to service the accounts, which includes renewing current policies and selling new products, thus retaining existing business and generating new business. Agents are also expected to use the client contacts to find and develop new leads and referrals. Ms. Palmer alleges that women received significantly less "premium worked" than men even though evidence shows that women were more successful than men in renewing the premiums that they were given. According to Ms. Palmer, by doing this, Combined ensures that women must work harder than men to earn the same amount of commission, achieve performance goals, and qualify for promotion.

C. Promotion

This case involves Combined's "Seventh Essential Enhanced Sales Force" ("Seventh Essential"), which comprises 80% of Combined's work force. At Combined, the country is divided into geographical divisions, each headed by a district manager who reports to the national sales manager and Vice-President/Managing Director of Seventh Essential (both of whom are men). Beneath divisional managers are regional managers, then sub-regional managers, district managers, and finally, sales managers. Ms. Palmer asserts that there has never been a female divisional manager in Combined's 83-year history and there are only a handful of female regional managers, two of whom submitted declarations stating their belief that women, including themselves, were discriminated against at Combined. According to Ms. Palmer, significant promotion disparities exist at two points in the job level hierarchy: 40% of women are cut out at the district manager level and another 65% of women are blocked out at the regional manager level. [ Page 4]

It is Ms. Palmer's contention that (1) even if women somehow make it to the regional manager level, those women have to work harder and encounter resistance from their male coworkers and subordinates every step of the way; and (2) these women are always passed up for promotion to divisional manager, even though they often outperform their male counterparts. For example, Casey McConnell, who was a regional manager during her employment with Combined, submitted a declaration stating that she had been turned down for promotions many times while less-qualified male co-workers got the promotions she requested. Ms. McConnell alleges that when she was finally promoted, she was continually harassed about her personal life and when she was denied requests for an additional sub-regional manager, one was assigned to another, much smaller state in her division that was run by a male regional manager whose region had not outperformed hers and as a result, she had to work much harder to reach a certain premium dollar base and was constantly threatened with demotion if she failed to reach it. Ms. McConnell also states that her regional office was 200 miles from her home, but her divisional manager refused to provide her with an office closer to her home even though she submitted numerous requests, and consequently, she had to convert her home into an office and was never reimbursed for those costs. Finally, Ms. McConnell asserts that she was passed up for promotion to the divisional manager level on at least three occasions while males with numbers inferior to hers were promoted to those positions and that despite her numerous complaints of sex discrimination to her divisional manager, nothing was ever done, and she was told to just "get over it."

When asked about the few number of women who make it to the regional manager level, Ronald Agypt, Vice President and Managing Director of Seventh Essential who reports directly [ Page 5]

to Combined's president, stated that he believed women did not pursue the promotions because of familial responsibilities and admitted that he had never taken any measures, such as hiring an outside firm, to determine why so few women were being promoted. Ms. Palmer contends that Mr. Agypt's testimony is illustrative of Combined's intentional disregard for its alleged gender inequality.

D. Harassment

In addition to the alleged gender disparities with respect to compensation and promotion, Ms. Palmer asserts that at every level of Combined, women are forced to endure harassment by male co-workers and managers, which usually takes the form of objectification, offensive sexual comments, and unwanted sexual advances. Such behavior, Ms. Palmer asserts, is rampant throughout Combined, often occurring on a daily basis. This harassment, according to Ms. Palmer, creates an environment of constant humiliation and degradation to women, sometimes rising to the level of physical violence, and complaints are ignored and sometimes result in intimidation. Some of the more troubling allegations set forth by Ms. Palmer involve sexual assaults and intimidation of the alleged victims to prevent legal action. While not all allegations of harassment rise to such a serious level, Ms. Palmer contends that it is the apathy towards and encouragement of the less violent forms of harassment that allows and increases the possibility that the more serious acts will occur. Ms. Palmer alleges that this misogynist environment inheres in the very foundations on which Combined rests, and as a result, all sexual forms of harassment, whether it be offensive comments or sexual assault, are tolerated by Combined at even the highest level of its management. Ms. Palmer asserts that it is Combined's deliberate indifference to the harassment of women that allows the widespread and continual harassment to [ Page 6]

occur and remain unaddressed, and because women have no real recourse to address these wrongs, they are forced to endure ongoing harassment and a higher potential of violence against them.

E. Training

This alleged environment of sexual harassment, according to Ms. Palmer, also results in inferior training and thus a diminished chance at success within the company. Ms. Palmer alleges that while male sales agents were mentored and groomed during training sessions, women were degraded, humiliated, and harassed, and male managers refused to take female sales agents seriously. Such inferior training, Ms. Palmer alleges, ensures that women are held back and ...

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