California Jury Awards Fired Allstate Employee More Than $18M

By Denise Johnson | May 8, 2018

A former Allstate Insurance Co. employee who was fired following an arrest has been awarded more than $18 million in damages.

The San Diego Union-Tribune reported a San Diego jury awarded 55-year-old Michael Tilkey about $2.6 million in actual damages and nearly $16 million in punitive damages in his in wrongful termination lawsuit.

Tilkey was fired by Allstate in 2016 after he was arrested in Arizona the prior year following an argument he had with his then-girlfriend.

According to the original complaint, Tilkey had worked for Allstate for 30 years, starting with the company soon after receiving his bachelor’s degree. He worked his way up to field sales leader, advising 30 independent agents and support staff. He alleged that despite his stellar work performance he was fired without warning in May 2015. The reason given for his abrupt termination was that “threatening anyone” was against company policy. The prior year he stated he had been falsely arrested based on complaints made by a former girlfriend who was under psychiatric care. The charges were later dropped. Allstate’s human resources department conducted an interview with Tilkey about the charges in late 2014. He said he heard nothing further until his sudden termination.

In his suit against Allstate, he contends he had never been convicted of a crime before or since then. Tilkey’s first cause of action alleged Allstate violated the California Labor Code, since it prohibits an employer from using an arrest that didn’t result in a conviction as a reason for termination. Tilkey’s second cause of action cited wrongful termination in violation of public policy, and the third cause of action cited defamation.

Additional case documentation revealed that Allstate discovered the situation when an email between Tilkey and his ex-girlfriend about the incident was flagged for review. Allstate conducted an internal investigation and initially determined no action would be taken; however, after the girlfriend sent an emotionally charged email directly to an Allstate CEO discussing the situation, the decision to terminate Tilkey was made.

His attorney Joann Rezzo said the firing violated state labor law, which prohibits employers from considering arrest records that don’t result in a conviction when considering termination.

She explained that on May 3, the jury found in favor of Tilkey on his two claims for wrongful termination in violation of California Labor Code Section 432.7 and coerced self-publication defamation. As a result, the jury awarded Tilkey $2,663,137 in compensatory damages ($960,222.00 for the wrongful termination claim and $1,702,915.00 for the defamation claim).

According to Rezzo, “The jury concluded that Allstate had violated Labor Code 432.7 when terminating Mr. Tilkey by basing its termination decision on records of his arrest and/or participation in a diversion program. The jury also determined that Allstate’s stated reason for the termination (i.e. alleged threats made by Mr. Tilkey) was not true and that Allstate failed to use reasonable care in determining the truthfulness of the stated reason for termination. The jury also concluded that Allstate had acted with malice, oppression and/or fraud (a prerequisite to an award of punitive damages).”

The next day, the jury awarded Tilkey $15,978,822.00 in punitive damages, making his total award $18,641,959.00.

An Allstate spokeswoman said the company disagrees with the verdict and plans to appeal.

The Associated Press contributed to this article.

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