In a recent case, three former Zurich American Insurance Company employees in Northern California were awarded more than $80 million in damages after being wrongfully terminated for taking “off-the-record” paid time off.

Insurance Company Workers Fired for Off-the-Record Time Off Get $80 Million

In a recent case, three former Zurich American Insurance Company employees in Northern California were awarded more than $80 million in damages after being wrongfully terminated for taking “off-the-record” paid time off. The verdict underscores the importance of clear communication and understanding of company policies concerning time off, especially when informal practices are involved.

The lawsuit dates back to 2018, when three workers were fired after participating in a supervisor’s unofficial paid time off program. They were employed in the workers’ compensation division at Zurich American’s Gold River offices in Sacramento County.

The program, known as “Omen Days,” was introduced by then-Assistant Vice President Chris Omen. According to court documents, he offered employees paid time off as a reward for high performance. Rather than being recorded in the company’s official system, this time off was an informal incentive to acknowledge employees’ “hard work and dedication.”

Under the arrangement, workers did not have to report their days off in Zurich American’s official Paid Time Off (PTO) system. Omen instructed them to take a day off without recording it or delete their time-off requests from the system. He said, “It’s on me,” to indicate the time off was a reward for their performance. According to the lawsuit, the entire office was aware of the unofficial policy, and many employees benefited.

However, Zurich American argued that the employees were fired because they had engaged in “time theft” by underreporting their PTO. The company suggested that despite the informal nature of the incentive, the workers should have known that taking unauthorized time off was against company policy. Zurich American also claimed the employees had been paid over $100,000 for time they did not work. Therefore, their actions amounted to theft even though they acted according to their supervisor’s instructions, the company said.

The three employees were fired in December 2017 following a brief investigation by Zurich American. In three separate lawsuits, they argued that the company had maliciously defamed and treated them unfairly. Although the employees’ attorney had tried to settle the case multiple times before going to trial in Sacramento Superior Court, Zurich American rejected the settlement offers ranging from $150,000 to $2 million per plaintiff.

The jury found that Zurich American had wrongfully terminated the employees and failed to assess the situation fairly. The three plaintiffs were awarded over $80 million in compensatory and punitive damages, including economic harm and reputational damage. Each former employee received $25 million in punitive damages.

California labor laws protect workers from being fired for unlawful reasons. Employees are also entitled to take time off from work for various reasons, including for medical leave, family matters or as part of employer-approved programs. Employers cannot retaliate against workers for exercising their rights under the law. Laws like the California Family Rights Act and the federal Family and Medical Leave Act allow eligible workers to take family and medical leave.

For workers, this case serves as a reminder to understand company policies fully and document all time-off requests, especially when informal programs are in place. Even if a supervisor approves time off, it is crucial to follow the official procedures to avoid misunderstandings or allegations of misconduct. On the other hand, employers should ensure that all policies are clearly communicated to employees and that any incentive programs are documented in a way that aligns with the company’s official time-off procedures.

At McCormack Law Firm, we are committed to helping workers ensure employers are held accountable for unlawful practices. While we are not involved with this case, our experienced San Francisco employment lawyers are ready to help you resolve workplace disputes. If you believe your rights have been violated at work, contact us for a free initial consultation to learn more.

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