Employment Practices Decisions Archive: 1937 - 1995, EMPLOYMENT-PRACTICES 36 EPD ¶35,219, Muriel E. Kraszewski et al., Plaintiffs v. State Farm General Insurance Company et al., Defendants., (Apr. 29, 1985), (Apr. 29, 1985)
Muriel E. Kraszewski et al., Plaintiffs v. State Farm General Insurance Company et al., Defendants.
United States District Court, Northern District of California.Civil Action No. C79-1261 TEH, April 29, 1985
Title VII--Civil Rights Act of 1964
Class Membership--Determination of--Job Applicants.
--A sex bias suit against an insurance company could be maintained as a class action on behalf of all female applicants and deterred applicants who had been or would be denied recruitment, selection, and/or hiring as trainee agents.
Back reference.-- ¶2306 .
Statistics as Evidence of Bias--Disparate Impact--Applicant Selection.
--Statistics showing that an insurance company’s hiring rates and workforce composition for female trainee agents fell far short of their availability in the labor force created a prima facie case of sex bias. The case was bolstered by testimony concerning specific acts of bias. The sales force had gone from 99.9 percent male in 1974 to 96.5 percent male by 1981.
Back reference.-- ¶2330.10 .
Work Force Analysis--Labor Market Area--Test Takers.
--An employer could not rely on the composition of applicants taking an eligibility examination as the measure of female availability for trainee insurance agent jobs. Complete records of test takers were not maintained, restrictive recruiting and job advertising practices discouraged female test takers, and selection practices were differentially used against women.
Back reference.-- ¶494.20 .
Word-of-Mouth Advertising--Sex Discrimination--Perpetuation of Female Exclusion.
--An insurance company’s reliance on word-of-mouth recruiting by male managers, and its failure to advertise or post job openings, violated the Act by perpetuating the exclusion of women from the sales force.
Back reference.-- ¶414.35 .
Nepotism--Job Applicants--Preference for Male Relatives.
--An insurance company’s policy and practice of male nepotism in recruitment and hiring violated the Act because of its unjustified disparate impact on women.
Back reference.-- ¶449 .
Employment Discrimination--Subjective Evaluations--Disparate Impact.
--An insurance company’s reliance on multiple subjective criteria in its recruitment, selection and hiring of trainee agents had a disparate impact on women and was unlawful.
Back reference.-- ¶257.30 .
Defenses--Job Relatedness--Recruitment and Selection.
--An insurance company failed to prove that its recruitment and selection practices and criteria were jobrelated, predictive of, or correlated to important elements of work behavior, necessary to safe and efficient job performance, and that no less discriminatory alternative was available.
Back reference.-- ¶2505.10.
Selection Procedures--Female Applicants--Discouragement.
--An insurance company’s discriminatory treatment of female applicants, nonpublication of job openings, negative responses to female applicants, and its predominantly male management operated to discourage and deter female applicants for trainee agent jobs. Use of male-dominated advertising also perpetuated the image of the company’s sales agent as being male.
Back reference.-- ¶461 .
Burden of Proof--Pretext for Bias--Unlawful Disparate Treatment.
--Three individual female employees established cases of unlawful disparate treatment on the basis of sex in being denied insurance agent positions. Reasons given by the employer for their treatment were shown to be pretextual. Statistical evidence of discrimination against female applicants as a class supported their claims.
Back reference.-- ¶2326.30 .
Issuing findings and conclusions in (DC Cal 1984) 34 EPD ¶34,504 , which awarded fees in (DC Cal 1984) 34 EPD ¶34,503 , which modified (DC Cal 1983) 34,502, imposing sanctions in (DC Cal 1982) 30 EPD ¶33,302 .
Guy T. Saperstein, Jeffrey S. Brand, Ruby S. Udell and Brad Seligman (Farnsworth & Saperstein), Oakland, California, for Plaintiffs.
Paul J. Laveroni and William G. James (Cooley, Godward, Huddleston, Castro & Tatum), San Francisco, California, for Defendants.
Parties and Jurisdiction
Henderson, D.J.: 1. Plaintiff Muriel Kraszewski is a woman and a resident of the County of Los Angeles, State of California.
2. On May 1, 1975, plaintiff Kraszewski filed a charge of discrimination with the Equal Employment Opportunity Commission alleging that defendants discriminated against her and others similarly situated by failing to recruit, select and hire women for the entry level sales position of State Farm trainee agent. Plaintiffs” Exhibit 84-1.
3. On April 29, 1979, the Equal Employment Opportunity Commission issued a Notice of Right to Sue to plaintiff Kraszewski. Plaintiffs” Exhibit 84-2.
4. On June 1, 1979, plaintiff Kraszewski filed her Complaint herein alleging, on behalf of herself and others similarly situated, that defendants violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e , et seq. by failing to select and hire women for the position of State Farm trainee agent.
5. Plaintiff Daisy O. Jackson is a woman and a resident of the County of Santa Clara, State of California.
6. On July 15, 1976, plaintiff Jackson filed a charge of discrimination with the Equal Employment Opportunity Commission alleging defendants threatened to terminate her as a State Farm trainee agent because of her sex. Plaintiffs” Exhibit 85-1.
7. On September 3, 1976, plaintiff Jackson filed an amended charge of discrimination with the Equal Employment Opportunity Commission alleging that defendants discriminated against her and others similarly situated by failing to recruit, select and hire her for the position of State Farm trainee agent. In addition, plaintiff Jackson alleged that she was terminated by defendants from her position of State Farm trainee agent because she is a woman. Plaintiffs” Exhibit 85-2.
8. On March 2, 1979, the Equal Employment Opportunity Commission issued a Notice of Right to Sue to plaintiff Jackson. Plaintiffs” Exhibit 85-4.
9. On June 1, 1979, plaintiff Jackson filed her Complaint herein alleging, on behalf of herself and others similarly situated, that defendants violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., by failing to recruit, select and hire women for the position of State Farm trainee agent. Plaintiff Jackson also alleged that defendants terminated her as a State Farm trainee agent because she is a woman.
10. Plaintiff Wilda Tipton is a woman and resident of the County of Ventura, State of California.
11. On June 15, 1979, plaintiff Tipton filed a charge of discrimination with the Equal Employment Opportunity Commission alleging that defendants discriminated against her and others similarly situated by failing to recruit, select and hire women for the position of State Farm trainee agent. Plaintiffs” Exhibit 86-1 and 86-2.
12. On February 27, 1980, the Equal Employment Opportunity Commission issued a Notice of Right to Sue to plaintiff Tipton. Plaintiffs” Exhibit 86-3.
13. On May 1, 1980, plaintiff Tipton filed her Complaint in Intervention herein on behalf of herself and others similarly situated, alleging that defendants violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq. by failing to recruit, select and hire women for the position of State Farm trainee agent.
14. On September 9, 1981, the court provisionally certified plaintiffs Kraszewski, Jackson and Tipton as representatives of a class which included:
All female applicants and deterred applicants who, at any time since July 5, 1974, have been or continue to be or may in the future be denied appointment, employment and/or training as Sales Agent Trainees by defendant companies within the State of California.
15. The named defendants, State Farm General Insurance Company, State Farm Mutual Automobile Insurance Company, State Farm Life Insurance Company and State Farm Fire and Casualty Company comprise the four State Farm Insurance Companies and are Illinois corporations doing business in the State of California.
16. Each defendant has been and continues to be engaged in an industry affecting commerce and has had and continues to have 15 or more employees for each working day in each of 20 or more calendar weeks for all years herein relevant and are employers within the meaning of Title VII as previously found by the Court in its Order Denying Defendants” Motion to Dismiss dated May 13, 1982.
Organizational Structure of Defendants” Agency Sales Force and Operations Division
17. The State Farm Insurance Companies sell multiple lines of insurance to the public throughout the United States and within the State of California.
18. The State Farm Insurance Companies are divided into two divisions--operations and agency. The agency division is responsible for the sale of insurance policies and the operations division is responsible for issuing and servicing policies.
19. The State Farm Insurance Companies have their headquarters in Bloomington, Illinois, and have three regional offices within the State of California located at Rohnert Park (serving Northern California and known as the Northern California Regional Office); Westlake (serving Central California); and Costa Mesa (serving Southern California and known as the Southern California Regional Office).
20. Each region is headed by a regional vice president who is responsible for all activities of the State Farm Insurance Companies in that region. Each regional vice president is responsible for both the operations division and the agency sales force within his region. Two deputy regional vice presidents assist each regional vice president. One supervises the region’s agency sales force, and the other supervises the region’s operations division.
21. The direct sale of defendants” multiple lines of insurance to the public is carried out by defendants” agency force. The agency force includes State Farm trainee agents, State Farm career sales agents, solicitors, office managers and agency secretaries.
Trainee Agents
22. The position of State Farm trainee agent is the entry level sales position at State Farm. This conclusion is corroborated by the following:
a. State Farm views the trainee agent position as a beginning position in which the individual “get[s] started” on his career as a State Farm sales agent. Thus, State Farm agency managers promise to “personally help you get started, every step of the way.” Career Presentation, Plaintiffs” Exhibit 8-10 at page 8. The Career Presentation asks “How do you get started?” and answers as follows:
It’s easy. You can begin right now with what we call pre-contract orientation.
This gives you the opportunity to get a first hand, behind-the-scenes view of the agent’s career. You actually try it yourself without disturbing your present position.
We simply work and learn together.
We help you every step of the way.
at pages 19-20.
b. After a minimum of two years, an individual may attain the position of career agent and thereafter may advance to management positions of agency manager or agency director. State Farm’s Career Presentation, widely used by agency managers to explain the agency career to prospective trainee agents, explains that the opportunity presented by a career in agency includes “opportunity for advancement.” The recruiting brochure points out that “[m]ost of the top people in State Farm started out as agents.” Plaintiffs” Exhibit 8-10, p.5 (emphasis added).
c. As testified to by Regional Vice President Roger Tompkins, State Farm prefers that individuals not have any insurance experience so that State Farm can mold an individual to meet State Farm’s needs and expectations. State Farm’s actual hiring practices reflect their emphasis on candidates without insurance sales backgrounds. Plaintiffs” Exhibit 2-10 reflects that only 19.6% of the trainee agents appointed between 1970 and 1981 had prior insurance sales experience. This statistic is consistent with State Farm’s admissions that no occupational or educational requirements for the trainee agent position exist, and that State Farm seeks trainee agents from “every walk of life.” See paragraph 42.
d. Not only does State Farm seek individuals with no insurance experience, but State Farm actively looks for individuals who have not yet chosen a career. The Agency Manager Pre-Contract Guide and Text (Plaintiffs” Exhibit 31) states that a “major group in which people may ... readily be interested in insurance selling as a career embraces people who have not yet definitely decided upon a career.” Chapter 3 at page 4. State Farm’s objective is to find people they can “interest” in a sales career and then train these individuals to be State Farm agents. Accordingly, the Agency Manager Pre-Contract Guide and Text suggests that new agents can be found in “most any acceptable and reputable occupation.” Plaintiffs” Exhibit 31, Chapter 3 at page 1.
e. Once a candidate is selected, the company teaches him what he needs to know. Thus, to make up for a lack of insurance sales experience, State Farm promises to completely train individuals in the sales and service skills, technical knowledge, business management and financial services needed to become an insurance sales agent. The agency manager promises “with my help in using State Farm’s proven training procedures, you will learn how to uncover and develop qualified prospects, how to sell them and how to take care of all their insurance needs. You will learn how to plan your activities, analyze the results and use your time to best advantage.” Career Presentation, Plaintiffs” Exhibit 8-10 at p. 21.
f. After the training period, an individual may become a career agent. Thereafter, State Farm continues to train the individual to promote opportunities for advancement. As the career presentation states: “We will help you become, and stay, a professional.” Plaintiffs” Exhibit 8-10 at p. 22.
g. The fact that State Farm seeks individuals without prior insurance sales experience and promises candidates training and advancement places the trainee agent position within the labor economist’s definition of an entry level job. During the course of his testimony, plaintiffs” expert labor economist, Dr. John Pencavel (see paragraphs 75 through 88), was asked:
Q. What is an entry level job?
A. I use the term to describe jobs, positions that are filled primarily by people from outside the company and jobs for which prior experience in that industry is not a necessary requirement. It is typically, a job that constitutes a rung in a ladder and the individual progresses up that ladder from this entry level position.
Q. Now is that definition of entry level job a commonly accepted definition in the field of economics?
A. Yes, it is.
RT: Wednesday, March 31, 1982, 89:5-17
h. Agency manager Warren Buckingham testified that the trainee agent position is the “entry level” sales position at State Farm.
23. State Farm’s trainee agents are employed by State Farm under a written contract known as the State Farm Agency Building Plan Agreement. Under the terms of the contract, State Farm trainee agents represent the State Farm Insurance Companies in the sale of insurance and are compensated by State Farm for such sales while receiving the necessary training to receive an appointment as a State Farm career agent. Plaintiffs” Exhibit 45.
The Training of the State Farm Trainee Agent and Advancement to the Position of State Farm Career Sales Agent
24. A State Farm trainee agent may advance to the position of State Farm career agent after a minimum of two years of training. During this period, the trainee agent is subsidized by State Farm. See paragraphs 43 to 52.
25. During the training period, the State Farm trainee agent completes approximately 30 hours of supervised self-study. The trainee agent familiarizes himself or herself with State Farm products, legal requirements concerning insurance sales, and sales techniques as deemed necessary by State Farm.
26. Agency managers Denny Duray, Joe Fernandez and Paul Bush, who testified about defendants” training courses 1, 2 and 3 respectively, each stated that women do as well as men in each of State Farm’s training courses. See also paragraph 88.
The State Farm Career Agent
27. Upon successful completion of the training period, State Farm appoints the trainee agent to the position of State Farm career agent. At that time, the individual enters into State Farm’s Agreement. Plaintiffs” Exhibit 58.
28. Under the terms of the agreement, career agents are trained and evaluated by State Farm; sell exclusively State Farm products; have their commissions established and administered solely by State Farm; and may be terminated by defendants, but are not considered employees of State Farm. Plaintiffs” Exhibit 58.
29. A State Farm career agent sets his or her own production goals, sets his or her own hours, chooses his or her own staff, and is responsible for paying his or her own expenses including office rent, supplies and secretarial staff. Plaintiffs” Exhibit 58.
State Farm Agent Secretaries, Office Managers and Solicitors
30. State Farm solicitors are employed by State Farm career and trainee agents. Solicitors must be licensed by the State of California.
31. Most State Farm career agents and trainee agents also employ secretaries and/or office managers whose tasks include office administration and frequently the sale of defendants” multiple lines of insurance. See paragraphs 109-12.
Agency Managers, Agency Directors, Deputy Regional Vice Presidents and Regional Vice Presidents
32. State Farm agency managers have primary responsibility for the recruitment, selection and hire of State Farm career and trainee agents. Each agency manager directly supervises approximately 10-14 trainee and career agents within a given geographical area.
33. Each agency manager is responsible to an agency director. The agency director oversees the recruitment, selection, hire and overall performance of the agents and agency managers within his geographical area. All agency directors are employees of defendants.
34. Each agency director reports to the deputy regional vice president for agency. The deputy regional vice president identifies and plans recruitment goals; receives files of potential trainee agent appointments; and, in conjunction with agency managers, agency directors and the regional vice president, helps assign career agents to agency managers. All deputy regional vice presidents are employees of defendants.
35. Each deputy regional vice president for agency is responsible to the regional vice president. All regional vice presidents are employees of defendants.
Defendants” Operations Division
36. The administrative and support functions of the State Farm Insurance Companies, including claims adjusting, underwriting, policy issuance and policy service are carried out by State Farm’s operations division in each of the three regions throughout the State of California.
37. In addition, each regional office has satellite offices primarily for claims adjustment throughout the state.
38. The Department of Agency Administration at each regional office maintains records for the region’s agency force. The records maintained include:
a. Personnel files for State Farm trainee and career agents;
b. Certain Declarations of Understanding (hereinafter Declarations) signed by individuals interested in pursuing careers in agency; and,
c. Certain Aptitude Index Battery (hereinafter AIB) Cards indicating that certain individuals took the aptitude examination required to become trainee agents.
General Characteristics of the Position of State Farm Agent
39. A career as a State Farm agent is an attractive career that includes the prospect of high income, independence, and the backing of a company that provides excellent insurance products and service. The fact that a career in agency is an excellent opportunity is corroborated by State Farm management personnel, current State Farm trainee and career agents, and documents promulgated by State Farm describing the agency career. For example:
a. Regional Vice President Donald Raker testified that a career in agency is a “golden opportunity,” highlighting substantial income, independence, and a feeling of service to the community as some of its benefits.
b. Similarly, Linda Leaming, a defense witness and career agent, testified that a career in agency provides a chance for high income, independence, the ability to be your own boss, and the backing of a superior insurance company.
c. Career agent Judy Semler testified that State Farm was the best company in which to pursue a career as an insurance sales agent, in part, because of the flexible hours, control over one’s life, good income and opportunity for travel.
d. These descriptions of a career as State Farm agent are consistent with the benefits of the career described in State Farm’s own publications. For example:
(1) State Farm recruiting brochures describe the agent position as providing “a career based on initiative and ability. Where the future is in the agent’s own hands.” Plaintiffs” Exhibit 8-7.
(2) State Farm’s Career Presentation promises high income, security and satisfaction if one pursues a career in agency. Plaintiffs” Exhibit 8-10.
Objective Qualifications Requisite to Becoming a State Farm Trainee Agent
40. The testimony of defendants” regional vice presidents, deputy regional vice presidents, agency directors, and agency managers is that to become a trainee agent required no objective qualifications. Rather, certain specific objective disqualifications preclude individuals from becoming trainee agents. These specific disqualifications include:
a. Failure to pass the AIB Examination, applicable to women only since April 19, 1978;
b. Failure to qualify for State Farm automobile insurance;
c. A prior felony conviction; and,
d. Failure to pass a physical examination.
41. Regional Vice Presidents Donald Raker and Roger Tompkins, Deputy Regional Vice President for Northern California Ray Wehde, and Agency Managers Warren Buckingham and Roy Soik all agreed that the following were not required to become trainee agents:
a. Education. Regional Vice President Raker, Deputy Regional Vice President Wehde, and Agency Managers Soik and Buckingham each testified that there were no minimal educational requirements to become trainee agents. In fact, Agency Manager Soik testified that an individual need not go beyond the eighth grade to become a State Farm agent. This testimony is corroborated by Plaintiffs” Exhibit 2-9, which indicates the wide range of educational experience of agents appointed between 1970 and 1981. In fact, as Plaintiffs” Exhibit 2-9 indicates, only 46.7% of the agents appointed between 1970 and 1981 had a bachelor’s degree or higher.
b. Prior work experience. The testimony is uncontradicted that no specific work experience is required to become a trainee agent. Agency Manager Buckingham testified that prior insurance experience was not required. Regional Vice President Tompkins testified that it is preferred that a prospective trainee agent not have prior insurance experience. Regional Vice President Raker testified that successful trainee agents came from “every walk of life.”
The testimony of defendants” management witnesses as to the diversity of backgrounds of State Farm agent is confirmed by Plaintiffs” Exhibit 2-10 which shows that agents had engaged in 113 different occupations prior to their appointment, including such nonrelated employment as barber and beer distributor. Similarly, Plaintiffs” Exhibit 119 reflects the same broad range of prior work experience.
c. Net Worth. Similarly, Messrs. Wehde and Buckingham each testified that an individual did not need any particular net worth to become a trainee agent. Defendants” own Career Presentation used to explain trainee agency to prospective candidates confirms that no minimum net worth is required. Plaintiffs” Exhibit 8-10 at p. 19.
d. Marital status, friendships, organizations. Regional Vice President Tompkins and Agency Manager Buckingham each testified that no particular marital status, friendships or organizational associations were required to become a trainee agent.
42. The lack of objective qualifications to become a trainee agent is reflected in the diverse backgrounds of successful State Farm agents, some of whom testified for defendants at trial. Defendants” testimony and personnel files of State Farm agents in evidence confirm that success as a trainee agent does not depend on a college degree or prior insurance experience. High school graduates, secretaries, housewives, and individuals facing extremely difficult personal problems are all potential successful trainee agents. These conclusions apply to both male and female agents. For example:
a. Career agent Linda Leaming is a high school graduate with two years of junior college. Prior to becoming a trainee, she worked as a secretary to State Farm agent Larry Konecne and before that as a secretary at an oil company. At the time of her appointment, she had five children and a husband who was totally disabled.
b. Career agent Judy Semler had no college degree and had previous experience as a rate clerk in an insurance company and as a waitress. Prior to becoming a trainee agent, she was secretary to State Farm agent Bill Kibbie. Ms. Semler was not married when she became a trainee agent.
c. Career agent Tempe Javits” previous work experience included being a file clerk and secretary to a structural engineer. Prior to becoming a trainee agent, she was a sales agent for the California State Automobile Association.
d. Career agent Carol Newland has a Bachelor of Science degree in home economics and taught school before becoming a successful trainee agent. Ms. Newland is divorced, and testified that at the time of her appointment, she was living “hand to mouth.”
e. Phyllis Frank is a high school graduate. She was a librarian, housewife, and secretary to career agent Robert Anderson before becoming a successful trainee agent.
f. Jeane Triby Sullivan was a housewife and mother when she became a trainee agent.
g. Linda Moore worked in State Farm’s Florida Regional Office as an underwriting assistant, machine operator, policy checker, forms control clerk and personal lines and underwriter before becoming a trainee agent. At the time of her appointment, Linda Moore described herself as a “classic case of failure” in that she had no college degree, no friends or contacts in California, and no stable employment. Nonetheless, Linda Moore’s success is attested to by the fact that she became State Farm’s first female agency manager in the United States in 1981.
h. Agent William Cortland Lancaster (son-in-law of agent Hy Fegatill) had no college degree, limited finances, and worked for a mortgage company when he was appointed a trainee agent. Plaintiffs” Exhibit 65-39.
i. Agent Lawrence Pirrone’s (son of Agency Manager Manny Pirrone) prior employment experience included laborer, bulk chemical handler, administrator at a law firm and agent with an Iowa insurance company. Plaintiffs” Exhibit 64-71. Agency Manager Madsen described his finances as “not too liquid.”
j. Agent Ken Anderson had no sales experience and had previously worked in an aerospace company that went bankrupt, and as a product sales manager. He also owed $27,000 to his father when appointed. Plaintiffs” Exhibit 63-2.
k. Agent Glenn Johnson has a college degree and previously worked as a tire changer, custodian, and office manager and solicitor in a State Farm agency for eight months. Plaintiffs” Exhibit 64-49.
l. Agent Roger Wilson worked as a manager and as a buyer in a large department store in Dayton, Ohio before coming to California at his father’s behest to become a trainee agent. Plaintiffs” Exhibit 63-65.
m. Richard Edward Cook was a P.E. Instructor at the YMCA when appointed a trainee agent.
n. Agent Billy Wehde (son of Deputy Regional Vice President Ray Wehde) had never lived in Monterey, where he was appointed a trainee agent, had no community contacts there, had nearly no assets, and his prior job experience was as waiter, manual laborer, and underwriting clerk for six months. Plaintiffs” Exhibit 64-1.
Compensation of Trainee Agents
43. During the two year training period the trainee agent is an employee of defendants and receives a monthly payment called the Specified Monthly Payment (hereinafter “SMP” ).
44. The amount of the SMP received by a particular trainee agent is calculated on a Monthly Budget Worksheet (defendants” Exhibit 180-2) which is completed during consultation between the prospective trainee agent and his agency manager. The amount of the SMP takes into account the prospective trainee agent’s personal expenses and his or her projected expenses in setting up an office. Regional Vice President Roger Tompkins testified that the resulting SMP typically covers most, if not all, of the trainee agent’s projected agency expenses including rent, supplies and secretarial costs.
45. During each month of trainee agency, the trainee agent is required to “validate” a portion of his SMP through commissions earned. For example, in January 1979, trainee agents were required to validate 5% of their SMP in the first month of their trainee agency graduating to 50% in the 24th month. Thus, if an SMP is $1,500 per month, the trainee agent must earn at least $75.00 in commissions in the first month to “validate” and $750.00 in commissions in the 24th month to “validate.” The commissions of the trainee agent are cumulative from month to month in determining whether a trainee agent has validated.
46. If a trainee agent does not earn enough commissions to “validate” he does not have to reimburse the company for the difference between the commissions required by the validation schedule and commissions earned. Failure to validate from month to month, however, may impact whether a trainee agent continues his employment.
47. Failure to validate, however, rarely occurs. Regional Vice Presidents Raker and Tompkins testified that nearly 100% of all trainee agents validate their contracts. Vice President Raker testified that at the time of trial 100% of his agents were validating. Agency Manager Buckingham also testified that nearly 100% of all agents validate. Each testified that their conclusions apply equally to male and female trainee agents. See paragraph 88.
48. Although trainee agents do not pay back the difference between commissions required for validation and commissions actually earned, they can keep all excess commissions earned above the required sums for validation. As Regional Vice President Raker explained, excess commissions may be earned on sales of all State Farm’s multiple lines of insurance. Raker testified that in his experience every trainee agent who validates earns excess commission.
49. The excess commissions earned do not diminish the amount of the SMP.
50. The testimony of Regional Vice President Raker is consistent with the testimony of former and current trainee agents called by defendants who all testified that they earned excess commissions during their trainee agency period. (e.g., See testimony of Agents Tempe Javitz, Jean Tryby Sullivan, Carol Newland, and Phyllis Frank.)
51. Since September 1982, State Farm trainee agents also are subsidized by payment of bonus compensation on top of their SMP and excess commissions.
52. Trainee agents are subsidized further by the availability of 3% loans from defendants to set up their offices. In some instances, trainee agents share existing facilities with State Farm career agents or agency managers to lessen any financial burden during the training period.
53. Although defendants maintain that a substantial investment is required to become a trainee agent, the evidence supports the finding that trainee agents” gross receipts (including SMP, excess commissions, and other compensation received from defendants) exceed their expenses and that on the average, trainee agents make a net profit during their training period. The testimony of defendants” own witnesses, Career Agents Javitz, Newland, Sullivan and Trainee Agent Frank, as well as defendants” own documentary evidence, support this conclusion. For example:
a. Career agent Sullivan testified that her trainee agency lasted from May 1975 to May 1977 during which time she received an SMP of $800 per month. She testified that in her first year of trainee agency she had expenses of between $800 and $1,000 per month. She testified that because of earnings from excess commissions she never experienced a monthly loss and never had to borrow. She described the start-up costs of a trainee agent as a “pencil, reverse directory and telephone.” She testified that her income increased steadily to the point that she now nets in excess of $40,000 per year.
b. Career Agent Javitz, who was a trainee agent from September 1979 through September 1981, testified that her gross income exceeded her expenses during her entire period of trainee agency except for the first three months. By the last three months of her trainee agency, her income exceeded her expenses by seven thousand dollars. She never took a loan to support herself as a trainee agent.
c. Career agent Newland testified that she initially shared office space with her agency manager and that as a consequence, “it didn’t cost anything to set up an office.” She testified that after two years she was netting the same $17,000-$20,000 dollars per year that she earned as a school teacher prior to becoming a trainee agent.
d. Trainee agent Frank testified that she had to take a $25,000 loan to finance her trainee agency which began June 1, 1981. A close examination of her financial earnings and expenses during her period of trainee agency, however, reveals that $6,000 of the $25,000 went to pay personal debts and that thousands of dollars were spent on expensive china and pottery which she expensed through her office. The record also reflects that by April 1982, the 10th month in her trainee agency, she grossed $2,000 and the following month $2,300. She testified that she expected the upward trend to continue.
e. Linda Moore, who is currently State Farm’s only female agency manager, corroborated the foregoing testimony with respect to the trainee agents she supervises and her own experience as a trainee agent. With respect to the former, she testified that nearly all her trainee agents earn excess commissions and some as much as $1,200-$1,500 dollars per month. She testified that most problems of trainee agents are personal rather than financial.
With respect to her own experience as a trainee agent, the record reflects that Ms. Moore became a trainee agent in April 1977. For 1978, her first full calendar year as a trainee agent, she showed a net profit on her tax return. See Plaintiff’s Exhibit 124. By 1979, the end of her trainee agency she showed a net profit of approximately $11,000. Her net profit nearly doubled the following year. At the present time she is a successful agency manager.
f. The experiences of these agents with respect to the investment required to be a trainee agent and the expenses of a trainee agent are consistent with the testimony of Agency Manager Warren Buckingham who testified that “as a rule of thumb” trainee agent expenses were 25-30% of his or her gross compensation.
g. The only other defense witness who testified regarding compensation as a trainee agent was Agency Manager Gerald A. Estabrook. Although he testified that his investment as a trainee agent was in the range of $40-$45,000 dollars, the fact must be considered in light of his testimony that during his training period, he was divorced. As a result of the divorce, he had a lot of added personal expenses that he had not anticipated when he became a trainee agent. He estimated that 35% of the $40-$45,000 went for those expenses.
54. Finally, Defendants” Exhibit 131.2, a survey prepared by defendants for use at trial, attempts to determine the average net compensation of trainee agents and career agents by comparing their gross compensation and expenses. The results of the survey, proferred by defendants, flatly contradict defendants” assertion that trainee agents suffer substantial financial losses during their two years as trainee agents.
55. Plaintiffs” Exhibit 2-13 specifies the average gross earnings of trainee and career agents based on years of service. The dollar figures in Plaintiffs” Exhibit 2-13 are uncontradicted in the record and conclusively show that the average gross earnings of a trainee agent after one year of service were $24,836.03 and the average gross earnings of a trainee agent after two years of service were $41,877.93. Page 7 of Defendants” Exhibit 131.2 indicates that expenses for the first year as a trainee agent are, on the average, $12,360.00 (12x$1,030) and $15,770.00 (12x$1,310) in the second year. Thus, a trainee agent nets, on the average, $12,476.03 in the first year ($24,836.03-$12,260) and $26,257.93 ($41,877.93-$15,720) in the second year.
56. Alternatively, if one disregards Defendants” Exhibit 131.2 and uses Agency Manager Buckingham’s estimate that expenses are 25-30 percent of an agent’s gross income, a trainee agent’s average net income in the first year is $17,385.22 ($24,836.03 gross; expense factor 30%) and $29,314.55 in the second year (gross $55,646.97; expense factor 30%).
Compensation of Career Agents
57. The compensation of State Farm career sales agents depends entirely on the amount of their insurance sales, service fees, and renewals.
58. For each of the years 1974 to the present, the yearly average gross compensation for all State Farm career agents throughout the State of California was as follows:
1974 $34,150.52 |
59. Plaintiffs” Exhibit 2-13 also specifies the average gross earnings of career agents based on years of service. These dollar sums which are also uncontradicted in the record, conclusively demonstrate that the average gross earnings of individuals who had been career agents for one year was $55,646.97, for two years $66,743.37, for three years $67,628.06, and four years $78,227.08. Individuals who had been trainee agents for ten years had average gross earnings of $87,778.72.
60. Page 7 of Defendants” Exhibit 131.2, read in conjunction with Plaintiffs” Exhibit 2-13, yields the following average net income for career agents: $36,566.97 after the first year as a career agent ($55.646.97-$19,080 in expenses); $44,915.37 after the second year as a career agent ($66,743.37-$21,828 in expenses); $43,052.06 after the third year as a career agent ($67,628.06-$24,576 in expenses); and, $52,055.08 after the fourth year as a career agent ($78,227.08-$26,172 in expenses).
Alternatively, application of the Bukingham 30% factor yields an average net income of $38,952.88 after the first year as a career agent (gross $55,646.97); $46,720.36 after the second year (gross $66,743.37); $47,339.64 after the third year (gross $63,628.06); and, $54,758.96 after the fourth year (gross $78,227.08).
Compensation of Agency Managers
61. The compensation of State Farm agency managers is based on the commissions of the State Farm career agents and the trainee agents who they supervise.
62. Agency Manager Warren Buckingham testified that he was earning approximately $125,000 dollars per year.
63. If a career agent becomes an agency manager he is entitled to “termination” payments for a period of five years. Said termination payments are based on the individual’s prior sales as a career agent. For example, Agency Manager Gerald E. Estabrook testified that he netted $40,000 as an agency manager in 1979 (less than 5 years after starting as a trainee agent); $48-$50,000 in 1980; and $56,000 in 1981. Also, he received an additional $7,000 each year as termination payments, and will receive $7,000 in termination payments for 1982 and 1983.
The Sexual Composition of State Farm’s Management, Career Sales Agents, Trainee Agents, Solicitors, Office Managers, Agency Secretaries, and Operations Division from 1970 to 1981
64. Since 1970, State Farm has never had a woman in the position of vice president, deputy regional vice president, agency director or agency manager except for one woman agency manager hired in October 1981. (Plaintiffs” Exhibit 2-4).
65. The sexual composition of State Farm Agency Management from 1970 to 1981 is reflected in the following statistics:
Breakdown by Sex of Managers, Directors and |
66. During the period 1972 through 1981, the workforce composition of State Farm sales agents (all agents, including trainee agents and career agents), by sex was as follows:
Agents Active at Year End (PLAINTIFFS” EXHIBIT 2-3) |
67. During the period 1970 through 1981, the new hires of State Farm trainee agents, by sex, were as follows:
Agent New Hires, by Date of Hire (PLAINTIFFS” EXHIBIT 2-6) |
68. During the period 1970 through 1981, State Farm hired 1980 trainee agents, of which only 95 (6.9%) were women. (Plaintiffs” Exhibit 2-6).
69. During the period July 5, 1974 through 1981, State Farm hired 821 trainee agents, of which 94 (11.4%) were women. (Plaintiffs” Exhibit 2-6).
70. State Farm career sales agents and trainee agents employ thousands of individuals as solicitors, office managers and secretaries throughout the State of California, nearly all are women.
71. The vast majority of all applicants for positions in operations since 1970, numbering approximately 35,000, were women.
Since 1970, the overwhelming majority of all employees in operations were women. This conclusion is reflected by the following table:
State Farm Composition at Year end, Operations (PLAINTIFFS” EXHIBIT 2-3) |
72. For the years 1970 through 1981 State Farm has hired 11,304 employees in their operations division within the State of California. Of those 11,304 employees, 9,448 (83.6%) were women. (Plaintiffs” Exhibit 2-5).
The Relative Availability of Females for the Position of State Farm Trainee Agent
73. Professor John H. Pencavel testified to the relative percentages of women available for the position of trainee agent.
74. The Court qualified Professor Pencavel as an expert pursuant to Federal Rule of Evidence 702 on the subjects of labor supply and availability.
75. Professor Pencavel’s resume is Plaintiffs” Exhibit 1-1 and reflects that:
a. Professor Pencavel is a full Professor in the Department of Economics at Stanford University where he has taught graduate and undergraduate courses in labor economics, economic theory and econometrics since 1969;
b. Professor Pencavel’s educational background includes a Bachelor of Science in Economics from the University of London; Master of Science in Econometrics, Economic Theory and International Trade from the University of London; and a Ph.D. from Princeton University in Economics;
c. Professor Pencavel has written articles for over ten publications in the field of labor economics including the Journal of Political Economy, the Journal of Economic Literature, Economika, and the Journal of Econometics;
d. Professor Pencavel has consulted and/or testified as a labor economist in other Title VII cases including Hawkins v. Carter Hawley Hale Stone, Inc. (N.D. Cal. C 71-2137 RHS); Gay v. Waiters Union, Local 30, 22 FEP Cases 280 (N.D. Cal. 1979) aff’d 30 FEP Cases 605 (9th Cir. 1982); Walker v. Sears, Roebuck & Company, C 76-2305 AJZ and I.M.A.G.E. v. Bailar, C 76-1979 ACW).
76. Professor Pencavel prepared a report for use in this trial in March 1982, entitled Analysis of Relative Availability of Females as Sales Agent Trainees by State Farm Insurance Companies. Plaintiffs” Exhibit 1-2.
77. Professor Pencavel’s testimony and report presented the results of his analysis of the availability of women for hire and training as trainee agents in California by State Farm Insurance Companies. Specifically, Professor Pencavel sought to derive a reliable estimate of the percentage of women in the pool of individuals available and qualified for employment as trainee agents in California by State Farm Insurance.
78. The sources of data used by Professor Pencavel included:
a. 1970 Census of Population, General Social and Economic Characteristics, California, PC(1)-C6, U.S. Department of Commerce, Bureau of the Census (April 1972).
b. 1970 Census of Population, Detailed Characteristics, California, PC(1)-D6, U.S. Department of Commerce, Bureau of the Census (November 1972).
c. Summaries of gross earnings of State Farm’s independent contractors.
d. California Statistical Abstract, Employment Development Department, Sacramento (issues for 1971, 1972, 1973, 1975 and 1980).
e. Current Population Survey, May 1979, U.S. Bureau of the Census, Washington, 1980 (available on computer tape).
79. In reaching his conclusions, Professor Pencavel considered a number of different concepts of relative female availability to insure a reliable estimate, one that is not “sensitive to the particular criteria chosen.” Pencavel Report at pp. 2-3.
80. Professor Pencavel concluded that the percentage of women available for the trainee agent position for the period 1970 through 1981 is “between 35 and 45 percent with a central tendency of 40%.” Pencavel Report at p. 19.
81. In arriving at his estimates of relative female availability, Professor Pencavel began with very broad concepts or criteria of availability that he subsequently amended and refined to insure a reliable estimate of relative female availability that is “not the product of some idiosyncratic definition of the relevant labor market....” Pencavel Report at p. 3. As is explained below, Professor Pencavel’s amendments and refinements of his concepts and criteria for the determination of relative female availability are consistent with State Farm’s actual practices with respect to the hiring of trainee agents.
82. Specifically, Professor Pencavel determined that the percentages of the availability of women to be trainee agents ranged from 29.0% to 59.5% with an average of approximately 40%. The specific percentages of relative female availability were derived in part as follows:
a. Professor Pencavel calculated from the 1970 Census of Popluation the percentage of females aged 19 to 65 years in California’s population and the percentage of females aged 16 years and over employed in California who satisfied certain educational criteria. The results of this analysis were:
1970 |
b. Professor Pencavel updated the availability percentages obtained in (a) above to May of 1979 by using Current Population Survey conducted by the Bureau of the Census for the Bureau of Labor Statistics. The updated percentages of relative availability of women were:
1979 |
c. Professor Pencavel refined and narrowed the availability percentages in (a) and (b) above cross-classifying individuals by educational attainment and occupation. Specifically, Professor Pencavel sought to determine the percentages of women with the educational attainments in (a) and (b) above who also fell into one of two occupational groupings: (1) Group I consisting of professional and technical workers; nonfarm managers and administrators; and sales workers; and (2) Group II consisting of all those employed in Group I plus workers in clerical and kindred occupations. Group I included such diverse occupations as librarians, nurses, social and welfare workers, teachers, store buyers, store floor managers, insurance agents and brokers, and real estate agents. Group II included occupations such as bank tellers, bookkeepers, insurance adjusters and examiners, secretaries, and real estate appraisers. Professor Pencavel testified that the two groups together constitute “white collar workers.” By cross-classifying these educational requirements with these job groups, Professor Pencavel obtained the following percentages of relative female availability as of 1970:
1970 |
d. Professor Pencavel updated these percentages for 1979 in a manner similar to (b) above. The availability percentages for 1979 were:
1979 |
83. Professor Pencavel corroborated his availability analysis by taking into account educational levels and earnings of State Farm career agents, as follows:
a. Professor Pencavel assumed that the supply/availability of labor/workers to any work activity depends on the activity’s terms of employment. Professor Pencavel testified that the most obvious condition influencing interest in the particular position is the wage paid, the assumption being that all things equal, individuals will gravitate towards those jobs that pay more.
b. Professor Pencavel used net earnings data from the 1970 Census and compared it with the estimated net earnings of State Farm career agents in 1969 calculated to be approximately $15,000 dollars.
c. Professor Pencavel assumed that the percentage of women in 1969 earning less than $15,000 would be potential candidates for employment as State Farm trainee agents. In addition, Professor Pencavel took into account the fact that certain individuals would not want to become career agents (if earning $8,000 or more) while some individuals earning more money would be willing to become trainee agents if earning up to $25,000.
d. Based on these assumptions Professor Pencavel arrived at the following availability percents:
With Annual 1969 income less than |
e. Professor Pencavel updated the figures in (d) above by using May 1979 data from the Bureaus of the Census and Labor Statistics. The updated figures assume a State Farm agent’s 1978 net median earnings to be $37,029 and is or her mean net earnings to be $40,683. Professor Pencavel further assumed that certain individuals earning as little as $20,000 would not be willing to become State Farm agents and that other individuals earning as much as $60,000 would be willing to become agents. Based on these assumptions, Professor Pencavel arrived at the following relative percentages of women available for hire as trainee agents:
With Annual 1978 Earnings Less than |
f. Professor Pencavel’s earnings analysis simply corroborates his other availability figures. In fact, the availability estimates based on Professor Pencavel’s earnings analysis are slightly lower than his estimates of the relative availability of females based upon population, education, and occupation categories. See paragraphs 81-82.
84. Professor Pencavel summarized his conclusions in the final paragraph of his report and testified to the same at trial.
A number of different concepts of relative female availability have been presented. The purpose of examining a number of different concepts is to insure that a robust estimate of female availability is arrived at, one that is not sensitive to the particular definitions chosen. In fact, these different concepts do not generate radically different estimates for availability: they cluster between 35 percent and 45 percent with a central tendency of 40 percent. (A simple average of the percentages tabulated from the 1979 current Population Survey is 40.9 percent and they range from 31.2 percent to 52.0 percent.) Therefore, the most plausible estimate of the fraction of adult women in the potential supply for State Farm’s trainee agent positions in California lies between 35 and 45 percent.
Pencavel Report at p. 19.
85. Professor Pencavel’s estimates of availability between 35% and 45% is also supported by the testimony of Agency Manager Linda Moore. She testified that in mid-1981, at a meeting of agency managers at State Farm’s Northern California Regional Office, Deputy Regional Vice President Ray Wehde or one of the four agency directors present told the agency managers that they would be expected to recruit 50% women. Ms. Moore testified that no one objected to this expectation and that she personally agreed with it.
86. Professor Pencavel’s estimates of the relative availability of women for the trainee agent positions are based upon broad categories of availability that take into account levels of education and broad categories of workers. Professor Pencavel did not rely on specific categories of availability such as percentages of women real estate agents and insurance sales workers for the following reasons:
a. The trainee agent position is an entry level position for which no specific prior experience, including insurance sales work, is required.
b. The minimum objective requirements for the position include a broad range of available persons.
c. State Farm’s recruitment documents indicate that a broad range of persons, including part-time workers and the unemployed, are sources of trainee agent recruits.
d. Professor Pencavel testified that the use of narrow categories such as insurance salesworkers is only appropriate if there is evidence that the company itself does not discriminate, an assumption not warranted in this case. R.T., April 1, 1982, 333:7-334:18.
e. Professor Pencavel’s availability analysis does not conflict with State Farm’s actual hiring practices. State Farm draws its trainee agents from virtually every walk of life and with varying educational backgrounds. Professor Pencavel testified that if one limited availability to narrow groups such as insurance salesworkers or individuals with particular educational backgrounds, “clearly you would be excluding a large number of people that State Farm demonstrates ... [it] is willing to hire.” R.T., April 1, 1982, 3391:15-17.
87. In fact, the categories upon which Professor Pencavel based his estimates of relative female availability mirror the categories used by State Farm in hiring trainee agents. This similarity is evident from information maintained on defendants” computer tapes, from defendants” recruitment brochures, and from testimony at trial. For example:
a. Data from defendants” computer tapes supports Professor Pencavel’s use of broad educational categories. Only 46.7 percent of State Farm agents have attained a bachelor’s degree or above.
b. State Farm’s Training the Trainer Topics (Plaintiffs” Exhibit 28), promulgated by defendants in April 1978, contains a section entitled “Prospecting for Female Agents” that lists the following broad “excellent sources of candidates” :
- Relatives and associates of agents
- Office employees of agents
- Agents” policyholders
- Female salespeople
- Regional or claims office employees
- Real estate employees
- Retail store employees
- Other insurance company employees
- Travel bureau employees
- Hotel/resort employees
- Door-to-door sales people such as Avon, Tupperware, and Sarah Coventry representatives
- Individuals and professional organizations such as the League of Women Voters and National Secretaries Association
- Service business employees including employees of banks, savings and loan associations, credit unions, loan companies
- Nurses and hospital employees
- Individuals in community organizations such as churches, the Red Cross, political campaigns, historical societies
- Individuals experiencing changes in economic situations such as being widowed, divorced, sending a last child to college, or deciding on a change in career
- Women in offices including office managers, receptionists, department managers, and bookkeepers
- Women proprietors and managers of advertising agencies, antique shops, boutiques, employment agencies, gift shops.
c. State Farm’s Agency Manager Pre-Contract Guide and and Text (Plaintiffs” Exhibit 31) instructs agency managers that they will find new agents in “most any acceptable and reputable occupations.” The Guide suggests that individuals who are “vocationally or economically disturbed or disturbable in their present jobs” or are “in search of a career” should be the principal targets of State Farm Agency Manager recruitment efforts. See generally, Chapter 3, Plaintiffs” Exhibit 31. The broad range of job categories suggested as potential sources of candidates by these guidelines include:
- Individual proprietors
- Chain store managers and assistants
- Junior accountants and law partners
- People in family-owned business
- People in elective or appointed positions
- Teachers and athletic coaches
- Trainees in large corporations
- Bank employees
- Successful people in unsuccessful or declining businesses
d. State Farm’s data indicates that their actual hiring practices mirror their admonitions to agency managers to hire agents from “all walks of life.” Thus, Plaintiffs” Exhibits 2-10 and 119, reflect that the prior work experience of State Farm agents includes such diverse occupations as barbers, beauticians, amusement workers, editors, systems analysts, bus drivers, restaurant managers, liquor distributors, beer distributors, as well as insurance salespersons. In fact, only 19.2% of trainee agents had previous experience as insurance agents.
88. Professor Pencavel’s conclusions with respect to the relevant percentage of the availability of women to be trainee agents are not altered by the various characteristics and “qualities” State Farm claims are required for appointment and success as trainee agents. That is, there is no evidence that any particular personal characteristics relevant to employment as State Farm trainee agents screen out relatively more women than men. This finding is corroborated by the testimony of Professor Pencavel, the testimony of numerous defense witnesses including State Farm agents, by defendants” expert witnesses, and by State Farm’s published materials regarding women trainee agents. For example:
a. Professor Pencavel testified that the following characteristics claimed by State Farm to be relevant to the appointment and success of trainee agents do not tend to screen out a greater number of women than men or affect the relative availability of women:
- The fact that an individual incurs expenses in conducting business.
- The fact that setting up an office requires an initial expenditure.
- The fact that five to twelve months may separate applying for a position and the actual hiring.
- The fact that the position requires good health.
- The fact that a person must be 18 years old to obtain a state license.
- The fact that an individual not be a convicted felon.
- The fact that State Farm trainee agents have a high rate of success.
- The fact that the position may require commuting or travel.
- The fact that the position requires intelligence, leadership, technical ability, and initiative.
- The fact that the trainee agent position requires two years of training.
R.T., April 1, 1982, pp. 308-327.
b. State Farm’s own publications, including Training the Trainer Topics, states:
The people we put on today must be of a caliber that assures us of their abilities to become professional, competent State Farm multiple line agents. These people come in all sizes, colors, backgrounds, and from both sexes.
Plaintiffs” Exhibit 28 at p. 4 (emphasis in original).
The document concludes that with respect to validation as trainee agents: “It is interesting to note that validation percentages ... favor females in every category.” at p. 7, (emphasis in original)
c. The testimony of defendants” regional vice-presidents, deputy regional vice-presidents, agency managers and agents corroborated the fact that the characteristics alleged to be relevant to the position of trainee agent do not tend to exclude women in greater proportions than men and do not affect the relative availability of women to be trainee agents. For example:
(1) Regional Vice-President Raker testified that the qualities found in “success patterns” such as initiative, honesty, integrity, stick-to-itiveness, ability to work 60-70 hours per week, and ability to obtain cash were equal for men and women.
(2) Defendants” Regional Vice-President for Southern California, Roger Tompkins, testified that he knew of no difference between men and women with respect to the following characteristics and abilities:
- initiative
- integrity
- intellectual capability
- ability to withstand abrasiveness and rejection
- ability for sales.
Regional Vice-President Tompkins also testified that he had no reason to believe that State Farm would not maintain its number one ranking in casualty sales if 50% of the agents were women. Nor did Tompkins believe that the compensation of agency managers or career agents would decrease if there were more women agents. He further testified that women trainee agents do as well as men.
(3) Deputy Regional Vice-President Ray Wehde testified that women have “success patterns” equal to that of men. He further testified that the fact that the position of trainee agent required weekend work, night work, and long hours, would not tend to screen out women in greater numbers than men.
(4) Agency Manager Linda Moore testified that “the right person” can be a successful career agent whether male or female. Agency Manager Moore believed that the qualities of commitment, sacrifice, and need for financial investment do not tend to screen out women in greater proportions than men. Agency Manager Moore also testified that the risk and rejection involved in being a trainee agent would not affect women in greater proportion than men.
(5) Agency Manager Gerald E. Estabrook testified that the same percentage of women as men stay in and complete the selection process.
(6) Agency Managers Denny Duray, Joe Fernandez, and Paul Bush testified that women do as well as men in State Farm’s agent training courses.
(7) Career Agent Jean Tryby Sullivan similarly testified that the trainee agent position is not more suited to a man than a woman, and the fact that she considered it a difficult job would not tend to screen out women in greater numbers than men. She also testified that the long hours involved in being a trainee agent discouraged men and women in equal proportions.
(8) Career Agent Judy Semler testified that she attended a panel discussion at State Farm’s Headquarters in Bloomington, Illinois, concerning women as agents. At the discussion, the panelists agreed that despite long hours, family commitments, and personal risks, women could be agents in numbers equal to men. She characterized the “excuses” why women could not be agents as “myths.”
(9) Even defendants” availability expert, Elizabeth Milrod, testified that she knew of no difference between men and women with respect to the following characteristics and abilities:
- ability to manage time
- drive and energy
- financial ability to become trainee agents
- ability to learn and retain material
- ability to meet and relate to people
- ability to plan well and establish realistic goals
- aptitude for insurance sales and potential to perform the duties of a trainee agent
- interest in high income, security, and the satisfaction of working as a private business-person
- ability to complete assignments in a timely manner
- ability to maintain a strong ego and handle rejection
- desire to increase income each year
- desire to advance rapidly within a career
- desire for the security of a career in trainee agency which includes selling highly regarded products, receiving personal help in getting started, and having the benefit of an aggressive promotional support system
- the desire to receive satisfaction by contributing to the welfare of others
- the desire for recognition in the community
- the ability to sell insurance.
R.T., July 6, 1982, pp. 534-562
Defendants” Criticisms of Professor Pencavel are Inaccurate and/or Without Consequence
89. Professor Pencavel did not assume that the personal qualities sought by State Farm in its trainee agents are generally present or universal throughout the population. Professor Pencavel testified that the qualities that State Farm seeks in fact may not be present in everyone, but there is no reason to believe that men have these qualities in greater proportions than women. Defendants presented no evidence to support a contrary conclusion. E.g., R.T., April 1, 1982, p. 350.
90. Defendants presented no evidence indicating that the qualities they seek in their trainee agents are found in only a small percentage of the population, or that the relative percentage of men and women having these qualities differs.
91. Similarly, plaintiffs” reliance on defendants” Exhibits 2-10 and 119 specifying the broad range of prior occupations engaged in by State Farm agents does not assume that each and every individual in a particular occupation is interested in becoming a trainee agent. Instead, Professor Pencavel testified that the relative proportions of men and women in each occupation interested in becoming trainee agents would not be equal. Defendants presented no evidence to support a contrary conclusion.
92. Defendants” criticism of Professor Pencavel’s educational and occupational refinements of his availability analyses is not supported by the record. For example:
a. Defendants” statements that women constitute a minority of individuals in “big ticket” commission sales is irrelevant because:
(1) Prior “big ticket” or commission sales experience was not required to become a trainee agent; and,
(2) State Farm prefers individuals without prior sales experience. (Tompkins)
b. Similarly, the fact that a majority of women salesworkers are salaried employees in retail stores selling less expensive items is irrelevant to Professor Pencavel’s conclusions. State Farm’s own documents (plaintiffs” Exhibit 28) suggest that individuals in retail sales are “an excellent source of trainee agent candidates.”
c. Defendants” criticisms of Professor Pencavel for including part-time and unemployed workers similarly ignore the sources from which State Farm actually draws trainee agents. Trainee agent appointments are made from part-time and unemployed individuals. Plaintiffs” Exhibits 2-10 and 119. One of State Farm’s successful women agents, Jean Tryby Sullivan, was unemployed at the time she became a trainee agent. Paragraph 42.
d. Defendants” criticisms of Professor Pencavel’s conclusions based on the supposedly small number of women with entrepreneurial experience is also without consequence.
(1) Entrepreneurial experience is not a requirement to be a trainee agent, and most State Farm agents had no entrepreneurial experience at the time of their appointments; (Plaintiffs” Exhibits 2-10 and 119), and
(2) The factual bases of defendants” conclusions are incorrect. In 1970, 25.9% of the self-employed salesworkers in California were women and, in 1979, that figure had risen to 40.2%. See rebuttal testimony of Professor Pencavel. These percentages are consistent with the Pencavel Report and defendants” expert, Dr. Richard Singleton, conceded that the percentage of women in self-employed sales roles “might be useful” in evaluating labor market availability. (R.T., February 8, 1983, 60:19-61:8).
93. Although defendants reject Professor Pencavel’s availability analysis and suggest that “refined” categories are more appropriate, the record reflects that:
a. Defendants failed to identify any “refined” categories that they felt accurately measured availability of women for the trainee agent position;
b. Defendants did not point out other appropriate data that Professor Pencavel failed to consider that would have changed or reduced the relative availability figures to which he testified; and,
c. When confronted with the sources for trainee agent recruitment set forth in State Farm’s agency manager recruitment documents and asked whether the list sounded like a “wide net,” Dr. Singleton conceded it “sounds pretty broad.” R.T., February 8, 1982, 70:1.
94. Defendants” criticism of Professor Pencavel for failing to consider personal qualities thought to be relevant to success as a trainee agent is without consequence. The record contains no evidence that these personal qualities are not found in equal proportions among men and women. To the contrary, the testimony is virtually uncontradicted that the personal qualities State Farm says it seeks in its trainee agents are found equally among men and women. See paragraph 88.
95. Defendants criticized Professor Pencavel’s conclusions, in part, because he did not know whether trainee agents worked pursuant to a written contract or were salaried, the length of precontract training, whether or not other insurance companies had comparable employees, and the amount of investment initially required to become a trainee agent. Defendants” criticisms are without merit. No evidence indicates that these items affect the relative proportions of men and women available to be trainee agents.
96. While defendants criticize Professor Pencavel for ignoring factors that have no impact on his availability analyses, defendants” availability experts Elizabeth Milrod and Richard Singleton, ignored factors that depressed and distorted defendants” test-take flow. The critical factors and information ignored by defendants” availability experts include:
a. Admissions by defendants” management personnel that State Farm does not have applicants because State Farm “digs up” and finds “prospects” where they can. See paragraph 202.
b. Admissions by defendants” management personnel that certain agency managers would not hire women. See paragraph 203.
c. Admissions by defendants” management personnel that State Farm maintained virtually no records of individuals who expressed an interest in becoming trainee agents but who did not take the AIB. See paragraph 204.
d. The evidence supporting the inference that defendants engaged in discriminatory recruitment practices including:
(1) Evidence of defendants” reliance on word-of-mouth recruitment;
(2) Evidence of defendants” failure to post available trainee agent positions;
(3) Evidence of defendants” failure to advertise for trainee agent positions;
(4) Evidence of defendants” failure to recruit for trainee agents in areas where defendants themselves claim excellent trainee agent prospects are to be found, i.e., operations and among agents” employees;
(5) Evidence of defendants” use of nepotism;
(6) Evidence of defendants” perpetuation of an all-male image in its advertising;
(7) Evidence of defendants” reputation for not hiring women;
(8) Evidence of defendants” application of undefined multiple subjective criteria in the recruitment, selection, and hire of trainee agents. See generally, paragraphs 170-89.
(9) Evidence of defendants” own admissions regarding their failure to recruit women. See paragraph 137.
97. In addition, throughout the course of the litigation, defendants commissioned a study on the interest and availability of women to become trainee agents. Neither Ms. Milrod nor Dr. Singleton considered that study in reaching her or his conclusions regarding the availability of women for the trainee agent position.
98. Defendants criticize Professor Pencavel’s conclusions because he assumed that the trainee agent position was an entry-level position in which individuals advance within the company. The criticism is without factual support because:
a. Defendants” agency management personnel have admitted that the trainee agent is an entry-level position. See e.g., testimony of agency manager Buckingham.
b. Defendants” documents support the proposition that the trainee agent job is an entry-level position that provides the opportunity for advancement. See paragraph 22 .
c. The position is filled primarily by people outside the company.
d. Prior experience in the insurance industry is not required.
e. It is the first sales job in the agency ladder.
f. The trainee agent may progress to career agent and potentially to agency manager, agency director, deputy regional vice-president, and regional vice-president.
g. Defendants provided no evidence to indicate that the trainee agent position is not an entry-level job in which individuals train to become career agents with the possibility of future advancement.
99. Defendants criticized Professor Pencavel’s earnings analysis for failing to take into account other forces at work in the marketplace, such as terms and conditions of employment. Yet, defendants presented no evidence to counter Professor Pencavel’s testimony that the overwhelming study and research in the field of labor economics supports the thesis that the primary consideration that motivates individuals to a particular field of employment is potential earnings.
100. Defendants” criticize Professor Pencavel’s earning analysis claiming that it does not take into account differences in earnings among trainee agents, between trainee and career agents, and among career agents and that it does not consider the investment required to become a trainee agent. The criticisms are without merti:
a. Professor Pencavel’s earning analysis did take into account the fact that different earnings levels impacted availability. See paragraph 83.
b. Although the earnings of trainee agents and career agents differ and career agents” compensation varies, the record is uncontradicted that career agents net substantial incomes in their first year as career agents and excellent incomes by their third year. See Discussion re defendants” Exhibit 131.2, paragraphs 54-55 and compensation of career agents, paragraphs 57-60.
c. The defendants misrepresent the financial situation of trainee agents to the following extent:
(1) While prospective trainee agents receive no money from State Farm during precontract, the trainee agent candidate can carry on his or her employment. There is no testimony to indicate that precontract interferes with a prospect’s employment.
(2) It is inaccurate that trainee agents make little or no money during their two years of training. See Compensation of Trainee Agents, paragraphs 43-55.
(3) Defendants ignore specified monthly payments given to every trainee agent and other financial assistance. See paragraphs 43-52.
(4) It is inaccurate that trainee and career agents invest substantial capital in becoming agents. See paragraphs 53-55.
Defendants” Explanations as to Why Women Constitute Such A Small Percentage of the State Farm Agency Force Are Without Factual Support
101. Defendants suggest that the small number of women in defendants” agency force is explained by the fact that insurance sales is perceived as an unattractive career. The factual record does not support such a conclusion. Defendants” management personnel testified in glowing terms about the career. Regional Vice-President Raker characterized a career as a trainee agent as the “golden opportunity.” Similarly, State Farm agents who testified at trial and State Farm’s documents describe the agent’s career as an opportunity for unlimited growth and income. (See paragraph 39). Defendants presented no evidence that the public perception of the career differed.
102. Defendants incorrectly assume that agency managers experience a general lack of interest by women in agency careers. To the limited extent that agency managers have sought women for a career in agency, women have shown an interest in pursuing the trainee agent opportunity. For example:
a. Agency Manager Gerald Estabrook testified that he established a booth at a Career Day in the Irvine area. He testified that 11 to 12 women signed up and expressed interest in further discussions. Agency Manager Estabrook also testified that he participated in recruitment seminars known as Success Action Seminars designed to attract women. He gave two lectures and characterized the response as “tremendous.” Other less successful efforts by Agency Manager Estabrook were either started too late (e.g., the Women’s Exhibition at Anaheim Convention Center) or were not face-to-face encounters and only involved leaving brochures at job placement centers (e.g., Saddleback College and University of California at Irvine).
b. State Farm’s first and only female agency manager, Linda Moore, testified that her first appointment as a trainee agent was a woman and that her strongest candidate in a selection pool at the time of trial was a female, Robin Howard. She also testified that difficulties with respect to interest in and commitment to a career as a trainee agent applied equally to men and women.
c. Defendants” Deputy Regional Vice-President Ray Wedhe admitted that part of the explanation for the small number of women in State Farm’s agency force lies with defendants” recruitment failures ( “We haven’t done enough to sell the career to women.” ) and not that women were disinterested. See paragraph 137.
d. At trial, defendants presented the testimony of six current women agents. Two of these agents (Javitz and Semler) actively sought careers as agents without being recruited by the company. The other four agents (Newland, Frank, Moore, and Sullivan) testified that the company first approached them to become agents. Once the company showed an interest, each woman committed herself to a career as an agent, successfully completed her precontract training, and is currently a successful State Farm agent. No evidence indicates that because they were women, they had a more difficult time committing themselves to a career in agency or were less interested in becoming agents. In fact, some of these women committed themselves to a career in agency despite difficult family situations. See paragraph 42.
103. Defendants” suggestion that women’s previously lower levels of education explain their small numbers in State Farm’s agency force is inaccurate:
a. The testimony is uncontradicted that there are no educational requirements to become a trainee agent; See paragraph 41a, and
b. In any event, Professor Pencavel accounted for educational levels in his availability analyses. See paragraph 82.
104. Defendants” suggestion that various unnamed “protective laws” accounted for the small number of women in defendants” agency force is without factual support. The record does not reflect a single protective law applicable to the position of trainee agent that affected the availability of women.
105. Defendants” suggestion that women’s roles as housewives and mothers accounts for their small representation in State Farm’s agency force is also without factual support. Defendants presented no evidence supporting their broad sociological generalizations that homemakers have limited interest in or availability for trainee agent positions in lesser proportions than Professor Pencavel’s estimates. Further, defendants” witnesses supported the conclusion that many women with children are interested in and capable of becoming State Farm agents. (See testimony of Newland, Sullivan, and Frank summarized in Paragraph 41).
106. Defendants” suggestion that lack of preparation for positions in a broad spectrum of occupations accounts for the small numbers of women in State Farm’s agency force is not supported by the record:
a. The testimony is uncontradicted that no preparation is required to become a State Farm trainee agent other than the completion of precontract. With respect to precontract, the evidence is uncontradicted that women do as well as men. (See, e.g., testimony of Raker, Tompkins, and Wehde).
b. The record is uncontradicted that once women are appointed trainee agents they can complete State Farm’s training as well as men. (See Testimony of agency managers Duray, Fernandez, and Bush.)
107. Defendants” suggestion that the small numbers of women in the State Farm agency force is explained by the “inevitable substantial investments” of personal capital is not supported by the record. In fact, the record supports the conclusion that the investment required to become a trainee agent is neither substantial nor inevitable. See paragraph 53.
108. Defendants” suggestion that the large financial risk involved in becoming a trainee agent accounts for the small numbers of women in the State Farm agency force is not supported by the evidence.
a. There is no support for the conclusion that a large financial risk is involved at all. See paragraphs 43-60.
b. The evidence is uncontradicted that nearly 100% of all trainee agents validate their contracts and earn commissions in excess of the specified monthly payment and that the rate of validation is the same for men and women. See paragraphs 43-52.
c. State Farm’s Regional Vice President Tompkins testified that State Farm has the highest success rate for new agents, the highest retention rates for agents, and the highest earnings of agents in the insurance industry.
d. The record does not support an inference that women are less willing to take a financial risk than men. In fact, women agents who testified were willing to become trainee agents despite poor financial circumstances (e.g., Semler--no money; Newland--living “hand-to-mouth” ) See paragraph 42.
e. Defendants” conclusions with respect to the impact of an alleged financial risk on women involves broad sociological generalizations for which no evidentiary support has been provided; and
f. Defendants” conclusions with respect to women’s unwillingness to commit themselves to a career in trainee agency because they earn less money than men is completely contrary to Professor Pencavel’s earnings analysis. See paragraph 83. In fact, it is precisely women who traditionally have earned less money who are likely to be most interested in a relatively high-paying career as a State Farm agent. Conversely, males earning more money in their careers would be less likely to risk a career change.
State Farm Secretaries, Office Managers, and Solicitors Constitute a Relevant Pool of Women for Trainee Agent Positions
109. State Farm agents” secretaries, office managers and solicitors are employees of the agent in whose office they work.
The testiomony is uncontradicted that the duties of State Farm secretaries, office managers and solicitors include:
a. Managing the administrative tasks of the agency;
b. Performing secretarial tasks for the agency;
c. Processing claims of policyholders; and,
d. Obtaining expiration dates.
110. In addition, the testimony of defendants” and plaintiffs” witnesses established that State Farm secretaries, office managers and solicitors were familiar with State Farm’s multiple lines of insurance and the techniques used to sell them to the public, and that State Farm secretaries, office managers and solicitors often performed precisely the same duties as the agents themselves. The testimony of numerous defense witnesses corroborated this proposition.
a. Regional Vice President Raker testified that State Farm secretaries, office managers, and solicitors were good sources of trainee agent candidates because they were familiar with State Farm products.
b. Agency Manager Edward Casselman stated that experience as a secretary and office manager was valuable to those interested in becoming agents.
c. Agency Manager Vance Basler testified that a particular male office manager learned so much that he was “almost an agent.”
d. Agency Manager Robert Carver testified that he appointed Randy Frager as an agent, in part, because he was a secretary to his father, and with that experience, he could “handle the agency.”
e. Career Agent William Grubbs testified that plaintiff Muriel Kraszewski wrote insurance, called clients for expiration dates, explained coverages, and sold additional lines of insurance to existing clients.
Similarly, Career Agent Larry Konecne testified that after Muriel Kraszewski had been employed by him for one month she frequently ran the agency because of his mother’s illness. During this time, her duties included answering phones, handling claims, writing applications, and binding auto and home owners policies.
The testimony of defense witnesses Grubbs and Konecne corroborated Ms. Kraszewski’s prior testimony that she could and did perform all the agents” duties.
f. Former career agent Edward Borgia, who employed Daisy Jackson, testified that plaintiff Jackson completely ran his agency for the years 1973 through 1976 while he practiced law full-time. Mr. Borgia admitted that he rarely went to the office and that virtually every sale during this three-year period was attributable to his office manager, plaintiff Jackson. Mr. Borgia testified that because Daisy Jackson was doing all the selling he paid her on a percentage basis.
g. Career Agents William Bremmer and Agency Manager Hicks further corroborated the relevancy of secretarial and managerial work in preparation for becoming a trainee agent. Career Agent Bremmer testified that plaintiff Wilda Tipton ran his office for two months in 1978 while he was on vacation. He confirmed Wilda Tipton’s testimony that she solicited the sale of State Farm’s multiple lines of insurance. In fact, Mr. Bremmer testified that he paid plaintiff a commission above her salary to solicit sales for him.
Agency Manager Hicks testified that when he gave precontract materials to plaintiff Tipton, he did not need to instruct her about certain fundamentals because of her years of experience as a State Farm Secretary and office manager.
h. Career Agent Francis Hanrahan testified that class member Sarah Cline sold all lines of insurance except life insurance while employed by him as a secretary and office manager. In fact, Mr. Hanrahan testified that she ran his office during his vacations and was an “excellent” employee who did “a good job in sales.”
i. Career Agent Judy Semler testified that for two years she carried out all the duties of the agent by whom she was employed as a secretary and office manager because of his physical disability. Regional Vice President Raker, familiar with Agent Semler’s background, admitted that her experience as an office manager was valuable to her success as a career agent.
j. Career Agent Linda Leaming testified that while employed as a secretary and office manager to Career Agent Ivan Campbell she did expiration dating, handled walk-in business, sold State Farm’s multiple lines of insurance and, in fact, was paid a bonus by Agent Campbell who encouraged her to sell State Farm products. Ms. Leaming testified that while employed as a secretary and office manager, she went into the “field” making calls on escrow companies and realtors to drum-up business. In one year, while employed as a State Farm office manager, she claimed to have sold one-half million dollars in life insurance.
k. Career Agent Ken Sieve, who employed Esther Molina as a secretary and office manager, conceded that Ms. Molina sold over one-half of his auto insurance, answered questions regarding policies, and was familiar with State Farm’s coverages and products. He further testified that because he did not speak Spanish, Ms. Molina helped sell and service the Spanish-speaking community, at one point bringing in more than fifty clients.
111. Class member testimony further corroborated the fact that State Farm secretaries, office managers, and solicitors performed virtually all the duties of State Farm trainee and career agents. For example,
a. Class member Sharon Barnes gave uncontradicted testimony that while employed by career agent Richard Laderbrush as an office manager, she did 95% of the selling.
b. Class member Barbara Bryley gave uncontradicted testimony that while employed by State Farm career agent Dick Sandburg she sold all lines of insurance.
c. Class member Dorothy Dillard testified without contradiction that as an office secretary and manager for career agent Claude Anderson she sold virtually all his insurance. In fact, Mr. Anderson rarely came into the office while class member Dillard was running the agency.
d. Class member Mary Lou Hollander testified, again without contradiction, that while working for career agents Boxx and Lundwig, she sold 50% of the insurance for the agency.
e. Class member Stella Lardie testified that after six months as a State Farm secretary, she sold homeowners insurance, auto insurance and easy commercial accounts. A short time thereafter, she began selling life insurance. Ms. Lardie received a commission on life sales and on certain other lines of insurance she sold.
f. Class member Debra McCamish testified that while employed as an office manager for career agent Ted Bowersox she ran the office in his absence (twice exceeding periods of three months) and that as of January 1981 she had a salary arrangement with Mr. Bowersox whereby she received a percentage of the increase in the business on top of her monthly salary.
112. Although the foregoing testimony supports Regional Vice President Don Raker’s testimony that secretaries were a good source of State Farm agents because they aided in sales and were familiar with the product, State Farm had no organized program for the recruitment of trainee agents from among agent secretaries, office managers or solicitors.
Women Employed in State Farm’s Operations Divisions Constitute a Relevant Pool of Women for Trainee Agent Positions
113. State Farm’s operations division provided a large source of available women for recruitment into positions as State Farm trainee agents.
114. No women hired by State Farm in operations or who applied for positions in operations were immediately disqualified for positions as State Farm trainee agents.
115. For the years 1970 through 1981, State Farm hired a total of 12,657 new employees in California. Of these 12,657 new hires, 9,543 (75.4%) were women. However, only 1.0% (95/9543) of the female new hires were trainee agents. By contrast, 40.4% (1258/3114) of the male new hires were trainee agents. Plaintiffs” Exhibits 2-6, 2-7.
116. State Farm often looked to persons with backgrounds in insurance operations in selecting individuals to fill trainee agent positions. For example, during the years 1970 through 1981, 454 of the trainee agents hired by State Farm previously had been employed in insurance operations positions with State Farm or other insurance companies. Plaintiffs” Exhibit 2-10. However, only 46 (10.1%) of these hires from insurance operations positions were women. Plaintiffs” Exhibit 2-10.
117. Regional Vice President Raker conceded that operations employees were a good source of potential female trainee agents because women in operations knew and understood State Farm products. Deputy Regional Vice President Wehde agreed.
118. Trial testimony substantiated the fact that individuals moving from operations to agency performed well as trainee agents, but that virtually all such individuals were male. For example:
a. Defense witness Paul Arritt, a supervisor in underwriting in the Southern California Regional Office, identified four individuals who left the regional office to become successful agents, three were male.
b. Class member Chris Zebratski identified five males who left the Southern California Regional Office to become trainee agents.
c. Larry Konecne and Larry Nazry were identified as current career agents who formerly were employed in operations.
119. Despite the fact that State Farm’s agency management cited operations as an excellent source of potential female trainee agents, the record reflects that defendants have discouraged recruitment of trainee agents in operations. For example:
a. Regional Vice President Roger Tompkins testified that defendants made no effort to disseminate information regarding trainee agent positions to operations employees.
b. Agency Manager Warren Buckingham testified that it was frowned upon to recruit agents in operations and that it was “generally understood that it should not be done.”
c. In fact, State Farm created several hurdles for any operations employee to transfer to agency. Before an employee could transfer, the employee needed the approval of his supervisor and division manager. Without this approval, the operations employee could not take the AIB. In addition, there is no evidence that regional office employees knew of the “procedures.” No defense witness testified to such a policy’s dissemination. In fact, if class members were aware of the transfer procedures, they did not use it for fear of alienating their supervisors. See testimony of class member McCamish.
Defendants” Objections to Operations as a Source of Trainee Agents Are Not Supported by the Record
120. Defendants” proposition that Operations was not a good source of trainee agent prospects ignores the testimony of defendants” management personnel, as well as defendants” own documents regarding sources of trainee agents. See paragraph 87.
121. Further, no facts in the record support plaintiffs” assumptions that women who worked in operations had no interest in trainee agent positions.
122. Defendants” reliance on its Management Assessment Register (MAR) to conclude that women in operations were not interested in becoming trainee agents is misplaced. MAR does not serve as an accurate indicator of the interest of women in trainee agent positions because:
a. It was available only to employees classified C-7 and above or to employees in Grade C-1 through C-6 who had obtained an AA degree. Since 90% of all women in operations had positions within Grades C-1 through C-6, the overwhelming percentage of women in operations was precluded from indicating interest in positions contained in the MAR.
b. The record does not reflect that MAR was uniformly distributed among operations employees, or that operations employees had the opportunity to show their interest. Both Messrs. Dedering and Rosemond testified that they did not know how or to what extent MAR was distributed or made available at the regional offices.
c. Since filling out MAR was “voluntary,” there was no guaranty that most women in operations filled it out.
d. Messrs. Rosemond and Dedering both admitted that the number of males allegedly interested in agency as reflected in MAR was inflated because it included numerous duplications. Thus, if an individual indicated a preference in MAR one year, that same expression of interest was counted in each subsequent year despite the fact that it was the same individual expressing the interest.
e. In fact, MAR did not indicate an interest in being a trainee agent per se. MAR asked whether a particular employee had an interest in agency or agency management, without defining the terms. There was no separate category to record an interest in becoming a trainee agent. Defendants” Exhibit 130.
Statistically Significant Disparities Exist When Dr. Pencavel’s Sources of Availability Are Compared with State Farm’s Trainee Agent New Hires and AIB Test-Takers
123. The following statistics highlight the extent of defendants” discriminatory practices herein:
a. Between January 1, 1970 and December 31, 1973 State Farm hired 460 trainee agents, but none were female. Plaintiffs” Exhibit 2-6.
b. In 1974, the year plaintiff Kraszewski pursued a trainee agent position, State Farm hired 126 trainee agents, only one was female. Plaintiffs” Exhibit 2-6.
c. As of December 31, 1977, nearly two years after plaintiff Kraszewski filed her charges of discrimination, State Farm had 5,573 operations employees and agents in California, including 2,607 (46.8%) women. Of the 1,619 agents, only seven (0.4%) were female. Plaintiffs” Exhibits 2-3 and 2-5.
d. Until 1974, State Farm employed only one female sales agent. Plaintiffs” Exhibit 2-3.
e. A great majority of the women (99.9% in 1970; 97.8% in 1981) employed by defendants held lower paying operations jobs while only 46.7% (1978) and 46.6% (1980) of the males held jobs in those categories. Plaintiffs” Exhibits 2-3 and 2-5.
f. Women were 50.7% of the adult population with four years of high school in 1970 and 53.2% in 1979, but only 0.1% and 2.2% of State Farm’s agents respectively. Plaintiffs” Exhibits 2-2 and 2-3.
124. Professor Richard Drogin, stipulated by defendants to be an expert in statistics, compared the various estimates of relative female availability testified to by Professor Pencavel with State Farm’s trainee agent new hires and AIB test-takers.
125. In this regard, Professor Drogin prepared Plaintiffs” Exhibits 2-14 and 2-16. Plaintiffs” Exhibits 2-6, a comparison of availability sources and hires of trainee agents, examines the statistical significance of defendants” hiring women compared to their availability in the population and civilian labor force with appropriate refinements for levels of education, age, occupations, and earnings.
126. Plaintiffs” Exhibit 2-14 compares availability sources and AIB test-takers and measures the statistical significance of defendants” recruitment practices (as measured by test-taker flow) when compared to Professor Pencavel’s estimates of relative female availability.
127. Professor Drogin concluded that a statistically significant disparity existed between each of Professor Pencavel’s availability pools in comparison with either State Farm’s new hires or AIB test-takers. The conclusions of Professor Drogin contained in Plaintiffs” Exhibits 2-14 and 2-16 were:
a. A comparison of trainee agent new hires with an external availability pool that includes the 1970 California population ages 19-65 with at least four years of high school (50.7% female) (Pencavel Report, p. 12) for the years 1970-1981 reveals Z-values ranging from -6.47 to -12.25 per year. For all years, the overall Z-value is -32.14--a significance probability of less than one chance in ten to the 225 power.
b. A comparison of the same availability pool as that in a. above and AIB test-takers for the years 1970 - 1981 reveals Z-values that range from -13.56 to -23.61 per year and a Z-value for all years of -62.27--a significance probability of less than one chance in ten to the 843 power.
c. A comparison of trainee agent new hires to an external availability pool consisting of the 1979 California popluation ages 16 and above with at least four years of high school (53.2% female, Pencavel Report, p. 12) for the years 1970-1981 reveals Z-values that range from -7.02 to -12.88 per year. For all years, the overall Z-value is -34.04--a significance probability of less than one chance in ten to the 252 power.
d. A comparison of the same availability pool in c. above with AIB test-takers for the years 1970-1981 reveals Z-values that range from -14.34 to -24.04 per year, and an overall Z-value for all years of -66.71--a significance probability of less than one chance in ten to the 967 power.
e. A comparison of trainee agent new hires with an external availability pool that consists of the 1979 California population age 16 and above with at least four years of college (44.4% female, Pencavel Report, p. 12) reflects Z-values that range from -5.14 to -10.0. The overall Z-value for all years is -27.67--a significance probability of less than one chance in ten to the 167 power.
f. A comparison of the same availability pool as in e. with AIB test-takers reveals Z-values that range from -10.82 to -20.78 for an overall Z-value for all years of -52.73--a significance probability of less than one chance in ten to the 582 power.
g. A comparison of trainee agent new hires with an external availability pool consisting of the 1970 California labor force age 16 years and above who were employed in Dr. Pencavel’s Group II (see paragraph 82c) with at least four years of high school (43.7% female, Pencavel Report, p. 6) reveals Z-values that range from -5.76 to -10.66. The overall Z-value for all years is -29.75--a significance probability of less than one chance in ten to the 193 power.
h. A comparison of the same availability pool as in g. above with AIB test-takers reveals Z-values that range from -11.84 to -22.09 and an overall Z-value of -56.66--a significance probability of less than one chance in ten to the 698 power.
i. A comparison of trainee agent new hires with an external availability pool consisting of the 1970 labor force age 16 years and above employed in Dr. Pencavel’s Group I (see paragraph 84c) with at least four years of college (29.0% female, Pencavel Report, p.6) reveals Z-values as high as -7.72 and an overall Z-value of -17.82--a significance probability of less than one chance in ten to the 69 power.
j. A comparison of the same availability pool as that in i. above with AIB test-takers reveals Z-values as high as -14.76 and an overall Z-value of -27.39--a significance probability of less than one chance in ten to the 163 power.
k. A comparison of trainee agent new hires with an external availability pool consisting of the 1970 California labor force age 19-65 who are employed with at least four years of college (23.7% female, Pencavel Report, p. 12) reveals Z-values that range per year from -2.34 to -7.28. The overall Z-value for all years is -18.88--a significance probability of less than one chance in ten to the 78 power.
l. A comparison of the same availability pool as in k. above with AIB test-takers reveals Z-values that range per year from -2.14 to -15.39 and an overall Z-value of -30.13--a significance probability of less than one chance in ten to the 198 power.
m. A comparison of trainee agent new hires with an external availability pool consisting of the 1979 California labor force age 16 years and over, who are employed with at least four years of college (36.0% female, Pencavel Report, p. 12), reveals Z-values that range per year from -3.44 to -9.06. The overall Z-value for all years is -22.21--a significance probability of less than one chance in ten to the 108 power.
n. A comparison of the same availability pool as in m. above with AIB test-takers reveals Z-values that range from -5.59 to -17.39 per year and an overall Z-value of -38.47--a significance probability of less than one chance in ten to the 322 power.
o. A comparison of trainee agent new hires with an external availability pool consisting of the 1979 California white collar labor force who was employed (52.1% female, Pencavel Report, p. 12) reveals Z-values that range per year from -6.77 to -12.60. The overall Z-value for all years is -33.19--a significance probability of less than one chance in ten to the 240 power.
p. A comparison of the same external availability pool in o. above with AIB test-takers reveals Z-values ranging per year from -14.03 to -24.29 and an overall Z-value of -64.74--a significance probability of less than one chance in ten to the 911 power.
q. A comparison of trainee agent new hires to the external availability pool consisting of Dr. Pencavel’s low estimate of women available for trainee agent positions in California (35.0%, See paragraphs 82 through 86, Pencavel Report, p. 19) reveals Z-values that range per year from -3.23 to -8.87. The overall Z-values for all years is -25.58--a significance probability of less than one chance in nineteen to the 102 power.
r. A comparison of Dr. Pencavel’s low estimate availability (35.0%, q. above) with AIB test-takers reveals Z-scores that range per year from -4.69 to -17.00 (1972) and an overall Z-value of -36.90--a significance probability of less than one chance in ten to the 296 power.
s. A comparison of trainee agent new hires to an external availability pool consisting of Dr. Pencavel’s high estimate of women available for the position of trainee agent in California (45.0% Pencavel Report, p. 19) reveals Z-values that range per year from -5.26 to -10.93. The overall Z-value is -28.08--a significance probability of less than one chance in ten to the 172 power.
t. A comparison of Dr. Pencavel’s high estimate availability (45.0%, s. above) with AIB test-takers reveals Z-values that range per year from -10.61 to -21.03 and an overall Z-value of -52.71--a significance probability of less than one chance in ten to the 604 power.
The Factual Bases Underlying the Underrepresentation of Women as State Farm Career Sales Agents and State Farm Trainee Agents
128. The underrepresentation of women in State Farm agent positions, despite large numbers of qualified available women, is explained by the following factors:
a. State Farm’s failure to recruit women in the agency workforce by failing to post job notices and to advertise trainee agent openings, and reliance on word-of-mouth recruitment by a nearly all male sales and managerial workforce;
b. State Farm’s deterrence of women from participation in the agency force by perpetuating an all male image in the advertisement of its products and recruitment of trainee agents;
c. State Farm’s discouragement of women from seeking sales positions;
d. State Farm’s application of subjective criteria that exclude women from sales positions; and,
e. Nepotism in the employment of trainee agents that favors male relatives of incumbent members of State Farm’s sales force.
State Farm’s Recruiting Policies Exclude Women
129. The State Farm Insurance Companies decided if and when to recruit trainee agents. This determination was made by analyzing market needs and the size of the agency workforce.
130. State Farm’s all male agency management force, including its regional vice presidents, deputy regional vice presidents, and agency directors decided whether or not to recruit.
131. Once a decision to recruit trainee agents was made, State Farm’s agency managers had primary responsibility for recruitment. In carrying out their recruiting responsibilities, agency managers worked with, and were ultimately responsible to, State Farm Agency directors, regional vice presidents, deputy regional vice presidents, and agency directors.
132. State Farm issued no written policies, standards or guidelines to agency managers, agency directors, deputy regional vice presidents and regional vice presidents regarding the recruitment of trainee agents.
133. Although the topic of recruitment was discussed at agency manager school, the manner in which recruitment was carried out was left to the discretion of the particular agency manager, male agency director, male deputy regional vice president, and/or male regional vice president.
134. The actual recruitment practices of State Farm’s agency managers consisted almost entirely of word-of-mouth recruitment by an all male managerial staff. Regional Vice President Raker described State Farm’s efforts to recruit trainee agents as a “talking network” in which agency managers “dig up” candidates by “go[ing] out and talk[ing] to people.”
135. The manner in which State Farm’s all male “talking network” operated was described in the Agency Manager Pre-Contract Guide and Text (Plaintiffs” Exhibit 31) which instructed agency managers to recruit trainee agent candidates through:
a. Use of a personal contact method that consisted of agency managers seeking recruits through personal friends; friends in community and social groups; former business associates; and people with whom the agency manager does business. Plaintiffs” Exhibit 31 at Chap. 3, p. 5.
b. Use of centers of influence that consisted of agency managers developing contacts with persons of “reputable and important standing in the community.” The center of influence served as the primary source of referrals for trainee agent candidates has been, from State Farm’s viewpoint, “by far the most effective single method of recruiting.” (Plaintiffs” Exhibit 31, Chap. 3 at p.6)
136. State Farm’s agency management witnesses described the actual manner in which these methods of recruitment operated. For example:
a. The testimony of 32-year incumbent State Farm Agency Manager Warren Buckingham typifies the manner in which agency managers recruited. Agency Manager Buckingham testified that he had primary responsibility for recruiting his agents and did so by:
(1) talking to agents, friends, and business associates;
(2) Relying on centers of influence; and
(3) Making personal observations.
Agency Manager Buckingham testified that in 32 years he never had a female center of influence or a female referral from any of his centers of influence. In 32 years, Agency Manager Buckingham never hired a woman.
Agency Manager Buckingham also explained his method of recruitment by personal observation. He testified that sometimes he personally observed the qualities requisite to a successful trainee agent in people he met. As an example, he explained that he recruited and hired his gas station attendant to be a trainee agent.
b. The testimony of Agency Manager Gerald A. Estabrook established that while new agency managers may be younger, their methods of recruitment remained the same. Mr. Estabrook testified that he relied primarily upon all male centers of influence.
Agency Manager Estabrook explained the operation of State Farm’s word-of-mouth recruitment process by describing the manner in which he was recruited to become a trainee agent and the manner in which he presently recruits trainee agents. With respect to the former, he testified that he was recruited by Skip Crank, a male State Farm agent and handball partner, who referred him to Agency Manager Joe Fernandez. Agency Manager Estabrook related that Mr. Crank consistently encouraged him to take advantage of the opportunity because of the income he could potentially earn.
As Agency Manager, Mr. Estabrook used similar recruiting techniques. He testified that he appointed males that he knew and recruited through his membership in the all male Newport Beach Athletic Club. His active recruitment of trainee agent candidates often occurred in the showers after a hard game of racquet ball.
c. Deputy Regional Vice President Wehde confirmed that agency managers recruited primarily through centers of influence ( “business and social clubs” ); personal contacts; and personal observation.
d. Regional Vice President Raker described his best contacts for locating trainee agent recruits as social acquaintances, people at the bank, dinner club friends, bank managers and the presidents of the Chamber of Commerce and Kiwanis Club.
137. By defendants” own admission, their word-of-mouth method of recruitment has restricted the number of female recruits. For example:
a. On February 10, 1978, Don Frischmann, Vice President Agency in the Manpower Development Division promulgated the document “Training the Trainer Topics.” Plaintiffs” Exhibit 28. The document directly admitted the impact of word-of-mouth recruitment by an all male agency management force on the number of female trainee agent recruits. The document states.
Agency managers face some real challenges in recruiting female agents.
1. Most managers gain their experience in what was virtually an all-male business environment.
2. The great majority of State Farm agents appointed over the years have been male, and so it is entirely logical that most managers would continue to look upon males as their primary source of recruits.
3. But women, too, are now interested in the tremendous career opportunity we have to offer.
a. Many of these women have the ability and desire to succeed in our business.
b. And State Farm is committed to bringing more women into our company as agents.
4. All of these factors would leave the average agency manager with a dilemma--i.e., how to go about intelligently evaluating female recruits.
Training the Trainer Topics at p. 3. (Emphasis added.)
b. The impact of State Farm’s recruitment and selection procedures on female applicant flow is also implicitly acknowledged by defendants in their “Agency Manager Precontract Guide and Text.” (Plaintiffs” Exhibit 31) In Chapter Two entitled “Candidate Identification,” the manual asked and answered the question of what constituted a qualified prospect and confirmed the inevitability of obtaining male recruits because of State Farm’s recruiting practices.
Before you will be able to get the names of qualified prospects, you will have to have in your own mind a picture of the kind of person that you want. Where will that picture come from? Since you are beginning your career as a recruiter, you will have to rely on the successful experience of people who have gone before you. After many months of experience, you will compose your own picture of the type of person you want. Chances are it will differ very little from the picture that has been used successfully by countless other agency managers. [Emphasis added]. Chapter Two, p.1.
c. Deputy Regional Vice President Wehde also admitted State Farm’s recruiting failures with respect to women. He testified that “the results are not as good as they could be” because State Farm had not done an adequate job of “selling the career opportunity to women.” He concluded that there “are more women out there.”
138. In spite of these failures, the use of a word-of-mouth network combined with personal observation was essentially the only means of recruitment used by agency managers.
139. State Farm did not advertise in any print or electronics media for trainee agents. Regional Vice President Roger Tompkins testified that State Farm had no need to advertise for trainee agents. Deputy Regional Vice President Wehde emphasized that it was corporate policy not to advertise because it attracted “the wrong candidates.” Despite his assertions with respect to “wrong candidates,” Deputy Regional Vice President Wehde conceded that he had not had any personal experience with advertising for nearly 20 years.
140. State Farm did not use employment agencies in any form to recruit trainee agents.
141. State Farm did not recruit on college campuses for trainee agent candidates.
142. Although State Farm management agency personnel acknowledged that operations is a valuable source of trainee agents (paragraphs 113 through 122), State Farm made little, if any, effort to recruit women from its many female employees in operations. Agency Manager Buckingham testified that recruiting trainee agents from operations was “frowned upon” by State Farm.
143. Although State Farm management agency personnel acknowledged that State Farm secretaries, office managers and solicitors were an excellent source of trainee agent candidates (paragraph 109 through 112), State Farm did not recruit trainee agents from their agents” employees.
144. State Farm did not post notices of available trainee agent positions in any of its regional offices, claims offices, or agency offices.
145. State Farm was familiar with modern recruiting practices, as evidenced by its method of recruiting employees for operations positions which differed completely from its practices in agency.
146. John Peterson, Personnel Specialist, and William Newlin, Regional Personnel Manager, described State Farm’s modern recruiting practices for operations and the reasons for their success. For example:
a. State Farm posted all openings for operations positions in conspicuous places because:
(1) Posting permitted employees to know of open positions and opportunity for advancement;
(2) Posting provided specific information on operations positions and maximized interest;
(3) Posting permitted State Farm to be aware of its human resources;
(4) Posting told people how to apply for a position;
(5) Posting gave people the opportunity to apply for positions; and,
(6) Posting helped State Farm retain good employees.
Messrs. Peterson and Newlin both testified that State Farm’s posting system worked effectively. Each testified that they had no reason to believe that job posting would not be equally effective for trainee agent positions. Each did not know why trainee agent positions were not posted.
b. State Farm recruited for operations positions on college campuses because:
(1) It made people aware of State Farm’s opportunities in operations;
(2) It helped locate the most qualified candidates; and,
(3) It ensured that people knew of the opportunities at State Farm.
John Peterson was unaware of any reason why college campus recruiting was not used for trainee agents and saw no reason why it would not be equally effective.
c. State Farm advertised for operations positions.
147. State Farm failed to use these modern, effective personnel practices in its agency division. Instead, it relied on the “talking network” of virtually all male managers to recruit trainee agents, restricting information regarding trainee agent openings primarily to males. Thus, State Farm limited the access of women to knowledge of available trainee agent openings and the opportunity to apply and compete.
State Farm Presented An All Male Image To The Public
148. Until 1979, the recruitment brochures produced by State Farm to explain and recruit for trainee agents conveyed the impression that State Farm agents were all male and that only males need apply. For example:
a. Plaintiffs Exhibit 8-5.1, a card used to explain the trainee agent position entitled “Our Agency Force” constituted State Farm’s only effort to recruit trainee agent candidates in its regional offices. It was a small card maintained in the reception area of each regional office. From 1970 through 1979, the card referred to agents in the male gender and stated that the agent “must also serve as ‘the friendly guy’ who lives nearby.” (emphasis added.)
b. Prior to 1979, a recruiting brochure for the general public entitled “What’s Your Job Worth ... Half Your Life” (Plaintiffs” Exhibit 8-7) contained 31 pictures of agents, all of whom were male. The clear impression conveyed by the brochure was that it was desirable to become a State Farm agent, but that all State Farm agents were male.
c. Defendants” Exhibit 176.1, a recruiting brochure for all positions with the State Farm Insurance Companies and entitled “Spectrum of Opportunities” contained a single page describing a career in agency. The agent pictured was male.
d. Through 1979, the career presentation widely used by agency managers to recruit trainee agents (Plaintiffs” Exhibit 8-10) contained 30 pictures of agents, all of whom were male.
149. In fact, prior to 1979, not a single woman was portrayed in any State Farm brochure recruiting individuals for the sales force.
150. In 1979, State Farm acknowledged the impact that its recruiting brochures had on the sexual composition of its sales force and ordered two recruitment brochures discontinued (Plaintiffs” Exhibits 8-6 and 8-7) and the Career Presentation revised, in part, because of the predominantly all male image conveyed by each. In a memorandum to regional vice presidents ordering the changes, State Farm noted that the revised Career Presentation “incorporat[ed] pictures of females and minorities, appropriate in today’s environment.” Plaintiffs” Exhibit 8-11.
151. Deputy Regional Vice President Wehde acknowledged that inclusion of women in recruiting brochures such as the Career Presentation would help bring women into the sales force.
152. State Farm’s advertisement of its insurance product, through the Good Neighbor theme on television, radio, and in the print media, similarly portrayed the position of State Farm sales agent as a male position intended to be filled by males. For example:
a. Plaintiffs” Exhibit 4-13 is a composite representative sample of defendants” television advertisements for the years 1970 through 1981. Not a single female agent was portrayed in any of the advertisements prior to 1979.
b. Plaintiffs” Exhibits 4-1 through 4-12, a large representative sample of defendants” print advertisements for the years 1970 through 1981, portrayed a sales force that is virtually all male. Not a single female appeared in any of these advertisements until 1977.
153. State Farm’s all male image affected women interested in becoming trainee agents. For example:
a. Plaintiff Muriel Kraszewski testified that the State Farm television ads with which she was familiar portrayed an all male image; and
b. Class member Debra McCamish testifed that because she saw all males in advertisements, her feelings were confirmed that the trainee agent position was for men and not women.
154. In sum, the image portrayed by State Farm in its advertisements and recruiting brochures depicted stereotypic images of passive females who cared for the family while their husbands earned a living.
155. This all male image deterred and discouraged women from applying for the position of trainee agent, and thus contributed to their under representation in State Farm’s sales force.
State Farm Has The Reputation of Not Hiring Women as Trainee Agents
156. State Farm had a reputation for not hiring female trainee agents--a view held by women who work in State Farm’s operations division and as State Farm solicitors, secretaries, or office managers, and by women seeking employment with State Farm.
157. The impact of State Farm’s reputation was inextricably intertwined with State Farm’s all male image. Regional Vice President Roger Tompkins testified that State Farm agents were “walking billboards” for the position. He stated that employees observed the agents and then decided whether to take the initiative to apply.
158. The testimony of plaintiffs and class members confirmed the impact that State Farm’s virtually all male agency force has had on the company’s image and its reputation with respect to hiring women. In each case, women believed that because of their own observations and comments by State Farm’s management employees, the company had a reputation for only hiring male trainee agents and desired to keep it that way. For example:
a. Former regional office employees and secretaries to State Farm agents Debra McCamish and Chris Zebratski each testified that they only observed male employees transferring from the regional office to agency and that they believed only males were permitted to transfer.
b. Former State Farm secretary and class member Sharon Barnes testified that she thought State Farm would not hire women; that she talked to agency managers about State Farm’s reputation; and that they confirmed her belief that State Farm did not hire women agents. Her feelings with respect to State Farm’s reputation were further confirmed because she only saw male agents.
c. Plaintiff Muriel Kraszewski testified that she understood State Farm to have a reputation of not hiring women agents. She testified that her knowledge of State Farm’s reputation was based upon conversations with Agency Manager Carver and Agency Director Miller who told her State Farm did not hire women agents. Her feelings with respect to State Farm’s reputation for not hiring women were confirmed by the fact that she never saw women agents. Plaintiff Kraszewski discussed State Farm’s reputation with other State Farm secretaries and office managers including class member Sarah Cline.
d. Dorothy Dillard, an employee of State Farm agents and agency managers for the past 28 years, testified that she knew that State Farm had a reputation for not hiring women. Her knowledge of this reputation was based upon conversations with Agency Manager Don Wilson who told her that he would not hire women. Her feelings regarding State Farm’s reputation were confirmed because she never saw a woman hired by Agency Manager Wilson in all the years she worked for him.
159. The perpetuation of the predominantly all male sales force reinforced State Farm’s reputation for not hiring female agents in the eyes of female secretaries and office managers to State Farm agents, women who work in operations, and women outside the company.
160. The reputation of State Farm with respect to hiring women for sales agent positions has discouraged women from applying for positions as trainee agents.
161. State Farm’s reputation with respect to hiring women for the positions as trainee agents has distorted and depressed the applicant flow rate of women for trainee agent positions and ensured their under-representation in State Farm’s sales force.
State Farm Actively Discouraged Women From Applying To Be Trainees
162. State Farm’s reputation with respect to hiring women for the position of trainee agent also has developed because of the manner in which State Farm actively discouraged women from seeking and attaining positions as trainee agents. This active discouragement of women is illustrated by the following examples:
a. State Farm’s secretaries and office managers familiar with agency work, who often performed the agents” sales tasks have been ignored, lied to, and/or given false and misleading information when they have inquired about the possibility of becoming trainee agents. Women have been told about educational requirements that did not exist, financial requirements not founded in fact, and false information with respect to availability of positions.
b. It was made clear to many women that the hiring of a female trainee agent was a rare occurrence and their prospects for hire as trainee agents were not good.
c. Women interested in becoming State Farm trainee agents were told by State Farm that the trainee agent position was too dangerous and not suitable for women.
d. State Farm’s secretaries and office managers interested in becoming trainee agents were often told that State Farm career sales agents, agency managers and/or agency directors did not hire women trainee agents.
e. Secretaries and office managers to State Farm career sales agents were told that they were too valuable to the company as secretaries and office managers and that they should not seek advancement to the position of trainee agent. In this regard, women were told that they should think first of the agents for whom they work and consider how lucky they were to be a part of a successful agency.
f. Women who applied for positions at State Farm regional offices were misinformed that women must begin in clerical positions and “work their way up” to the position of trainee agent.
g. Many women applying at the regional offices who directly expressed an interest in marketing or sales were not informed of the nature of the trainee agent position and/or the availability of such a position.
163. The trial record corroborates these conclusions that women employed as State Farm secretaries, office managers, or solicitors were actively discouraged from becoming trainee agents. The following former and current State Farm secretaries, office managers, and solicitors testified to the active discouragement to which they were subjected in their efforts to become trainee agents.
[Kraszewski]
a. Plaintiff Muriel Kraszewski spoke with at least eight individuals about becoming a trainee agent. Despite her extensive experience as a secretary and office manager in which she performed most, if not all, of the duties of her agent employer (see paragraphs 225-47) she was discouraged by most of the individuals with whom she spoke. For example:
(1) Agent Larry Konecne told her in 1974 that State Farm did not hire women agents and laughed when she expressed her interest.
(2) Agency Managers Robert Carver, Lou Matz and Manny Pirrone told her that they could not hire plaintiff Kraszewski because they had “no files” to give her. In fact, there was no such requirement to become a trainee agent.
(3) Agency Manager Matt Madsen told plaintiff Kraszewski that becoming an agent required long hours, work every night, time away from the family, and that it would be difficult for State Farm to protect women agents.
(4) Finally, Agency Manager Eugene Miller told plaintiff Kraszewski in March 1975 that he could not hire her because she had no college degree, which he maintained was required by an alleged State Farm rule change in December 1974. In fact, no such requirement existed. See paragraphs 221 through 243.
[Jackson]
b. Plaintiff Daisy Jackson, who ran Ed Borgia’s State Farm agency while he practiced law full time, was discouraged in the following manner:
(1) She was informed by Agency Manager Don Wilson as early as 1973 that “State Farm did not hire women agents.”
(2) Plaintiff Jackson testified and Agency Manager Wilson conceded that he told plaintiff Jackson that State Farm was looking for family men with college degrees.
(3) Plaintiff Jackson testified and Agency Manager Wilson conceded that he told plaintiff Jackson that he preferred married men with nonworking wives and that he often attempted to persuade the wives of agents to become secretaries or office managers for their husbands.
(4) Plaintiff Jackson testified and Agency Manager Wilson conceded that he told plaintiff Jackson that he did not encourage plaintiff Jackson to become an agent because he felt that the Borgia agency was a good opportunity for her and that he did not want agent Borgia to lose a good office manager. Agency Manager Wilson testified that he consistently told other State Farm agent secretaries, such as Claudia Haynes, that they should remain secretaries rather than seek the position of trainee agent.
(5) During the period April 1973 through June 1974, the time frame when plaintiff Jackson expressed an interest in agency, Agency Manager Wilson had an opening. Agency Manager Wilson, however, appointed his son Roger to the position. At the time of Roger Wilson’s appointment, Roger was not living in California and had to be persuaded to apply and return to California by his father. Plaintiffs” Exhibit 63-65.
(6) Plaintiff Daisy Jackson expressed an interest in becoming a trainee agent in 1975 to her agent Ed Borgia. At that time, agent Borgia told her that women made neither good sales agents nor lawyers.
(7) But for the active discouragement by her agent and agency manager, Daisy Jackson would have been a State Farm trainee agent as early as 1973 rather than February 1976, when she was finally given a trainee agent position. See paragraphs 244-76.
[Dillard]
c. Class member Dorothy Dillard, longtime agency secretary and office manager, (see paragraph 114) was discouraged as follows:
(1) She testified that Don Wilson told her in 1964 that he would not hire a woman; that he had had back luck with women in the past; and, that she could speak to another agency manager, but he doubted it would do any good.
(2) In 1974 or 1975, upon the death of Agent George Seifert, Agency Manager Wilson told class member Dillard that he would not consider her because “I don’t hire women and, in any case, being a agent is too difficult for women because of the long hours and night work.” Agency Manager Wilson told her that being an agent was better suited for men and that women made better secretaries.
(3) Agency Manager Wilson told class member Dillard, as he had told plaintiff Daisy Jackson, that he could not take a good secretary away from an agent.
(4) Class member Dillard was never offered the Aptitude Index Battery Test and was never put into a selection pool.
[Cline]
d. Class member Sarah Cline, agent secretary and office manager (see paragraphs 113 through 114), spoke with at least six individuals about become a trainee agent and, in each case, was actively discouraged, lied to, and misinformed about the qualifications for and availability of trainee agent positions. The active discouragement of class member Cline included the following:
(1) When Cline first expressed an interest in becoming a trainee agent, Agency Director Eugene Miller told her that there was an “unwritten law in the region” that State Farm would not hire a female because of a fear that women would be raped and that women would not want the responsibilities or duties. Agency Director Miller also told class member Cline that she had to be married and needed a college degree. When Sarah Cline said, “I am married,” he said, “O.K., then you have to be single.”
(2) Class member Cline next spoke to Agency Manager Robert Carver, who told her he had no openings.
(3) Because class member Cline knew plaintiff Kraszewski and also knew that plaintiff Kraszewski was dealing with Agency Manager Madsen, Ms. Cline expressed an interest to Agency Manager Madsen regarding trainee agency. Class member Cline asked Agency Manager Madsen if State Farm could hire a woman, and he said, “I think I can get it through.” He also stated, however, that she had to have a college degree.
(4) Because Agency Manager Madsen indicated the need for a college degree, Sarah Cline completed 47 units and her degree in one year. She immediately informed Agency Manager Madsen who referred her to Agency Managers William Gabbard and Ed Casselman.
(5) In September or October 1975, Sarah Cline met with Agency Manager Gabbard, who told her he had no openings. In fact, he had no openings because he committed himself to the appointment of two males, Ron Greek and Stan Jones. He had solicited and recruited them prior to his becoming an agency manager without considering other individuals. In 1976, Agency Manager Gabbard appointed two additional males, and despite the fact he considered Cline a “strong” candidate, he never informed her of or considered her for these additional positions.
(6) Agency Manager Gabbard testified that he asked class member Cline whether she planned to have children so that she could “realize the impact of trainee agency on her domestic situation.”
(7) Thereafter, class member Cline went to see Agency Manager Casselman who at first gave her precontract study materials, but then called and said there were “no longer any openings” and that “there had been a freeze by the company.” Class member Cline testified that she was “shocked” and “crushed.”
(8) Thereafter, class member Cline went to see Agency Manager Ersel Smith, who told her there would be no openings for one or two years. Agency Manager Smith testified that he considered Cline a “long term prospect,” yet he failed to inform her of or consider her for an opening filled by William Barvin in February, 1977. Despite contacting six agency managers and directors and her strong qualifications as a prospective agent, Sarah Cline was never put into a selection pool and allowed to compete for a trainee agent position.
(9) She is now a successful sales agent for Farmer’s Insurance Group.
[McCamish]
e. Class member Debra McCamish, former regional office employee and former secretary to various State Farm agents (see paragraph 111), testified that although she expressed an interest in agency during the time she was in the regional office as well as during the time she was employed by State Farm agents, she was never encouraged to become a trainee agent and was often actively discouraged.
(1) While in the regional office, class member McCamish asked Career Agent Gary Orgill and regional office employee Paul Arritt what was required to become a trainee agent. Neither of them explained the process to her or referred her to an agency manager or agency director.
(2) Class member McCamish testified that while employed by Career Agent Gary Baker, she expressed an interest in agency but was told it required a Bachelor of Arts degree and a “large financial commitment.” She was never told about the AIB or given an opportunity to take it.
(3) While employed by Agent Ted Bowersox, class member McCamish expressed her interest in agency. Agent Bowersox put her in contact with Agency Manager Paul Bush, who told her that becoming an agent would require a investment of $30,000 and that a college degree was preferred. She was never told about the AIB or given any forms to fill out by Agency Manager Bush.
(4) Agency Manager Bush told her that it was difficult for women to become agents.
(5) Agency Manager Bush testified that he did “nothing” to encourage class member McCamish to become an agent; that he never offered her an opportunity to take the AIB; that he never explained to her that agency was “a good opportunity” ; and that he did nothing to “sell” her on becoming a trainee agent.
(6) At the time class member McCamish expressed an interest in agency to Agency Managers Bush and Bowersox, an opening was filled by a male, Richard Cook. She was never permitted to compete for that position. Richard Cook was ultimately terminated for unsatisfactory performance.
(7) Class member McCamish was never permitted to take the AIB, enter a selection pool, or become a trainee agent. She is now a successful sales agent with Farmer’s Insurance Group.
[Molina]
f. Class member Esther Molina, secretary to State Farm Agent Ken Sieve (see paragraph 110) testified to the manner in which Agent Sieve discouraged her from becoming an agent:
(1) Agent Sieve told her it was difficult for women to become agents because business people did not respond to women as they do to men.
(2) Agent Sieve told her that she had to have a college degree and make a substantial financial investment.
(3) Agent Sieve never told her about financial support from the company such as a specified monthly payment or any other possible support.
(4) Agent Sieve told her that the job involved long hours, much time away from the family, and that she would have to go back East to train for six weeks.
(5) Class member Molina testified that Agent Sieve never explained the procedure to become an agent, never offered her the AIB, and never offered her any encouragement.
(6) Class member Molina testified that she also expressed an interest in agency to Agency Director Dufresne and that he told her that she did not have enough experience and that she was not qualified.
(7) Esther Molina was never given the opportunity to take the AIB, was never put into a selection pool, nor hired as a trainee agent.
[Zebratski]
g. Class member Chris Zebratski was employed at the Southern California Regional Office for nine years. During that time, she advanced from the position of clerk to personal lines underwriter. During this period, she also worked with numerous agents. Because of her contact with agents while at the regional office, she became interested in becoming an agent. She testified to the following discouragement:
(1) Class member Zebratski testified that she spoke with Agency Manager Muril Clift, with whom she had contact at the regional office. He referred her to Agency Director Del Eisenbraun. Agency Director Eisenbraun told class member Zebratski that she needed $5,000 in the bank; that he was concerned with her lack of a college degree; and that he was concerned that she was too attractive which might cause problems with commercial clients and the wives of his incumbent agents.
(2) While class member Zebratski was employed at the regional office and being discouraged from pursuing agency, she saw five male employees--Mike Karris, Terry Knorr, Greg Magedman, John Johnson, and Bob Simmons--transfer from the regional office to agency.
(3) Class member Zebratski eventually left Southern California but did not apply for agency in Northern California because of her rejection in Southern California.
(4) Class member Zebratski was never offered an opportunity to take the AIB, was never put into a selection pool, and was not hired as a trainee agent. She is now a successful sales agent with St. Paul Fire & Marine Insurance Company.
[Bryley]
h. Class member Barbara Bryley, an agency secretary and office manager to Agent Sandberg from 1979 to 1982 (paragraph 111) was actively discouraged from becoming a trainee agent in the following manner:
(1) Class member Bryley testified that Agency Manager Robert Carver told her that State Farm did not hire females and that to become a trainee agent either a college degree or five years work experience was necessary. He also told her that she would need $20,000 to $25,000 to become a trainee agent.
(2) Agency Manager Carver never gave her the AIB nor did anything else to explain how to become a trainee agent.
(3) During his trial testimony, Agency Manager Carver conceded that class member Bryley’s Agent, Dick Sandberg, threatened to sue “everyone in sight” if class member Bryley was appointed as an agent.
(4) Despite Agency Manager Carver’s failure to encourage class member Bryley, he did appoint Randy Frager. The appointment of Frager was made under the following circumstances:
(a) Frager was the son of an incumbent State Farm agent;
(b) Frager was given the AIB, failed it and permitted to take it a second time;
(c) Frager was helped because, in Carver’s own words, he was “the son of a good agent” ;
(d) Agency Manager Carver referred Randy Frager to two different agency managers, one of whom did not have an opening and another who was in an area that Randy Frager did not want;
(e) To accommodate Frager, a special position was created for him;
(f) There was no selection pool for the appointment of Randy Frager;
(g) He thought Randy Frager would be a good agent because he was a former secretary in his father’s agency.
(5) Class member Bryley was never given an opportunity to take the AIB, was not put into any selection pool, and was not hired as a trainee agent. She is now a successful agent for Farmer’s Insurance Group.
[Hollander]
i. Class member Mary Lou Hollander, while employed by Career Agents Harold Boxx and Robert Ludwig (See paragraph 111) was told by Agent Ludwig that “you do everything I do.” Nonetheless, class member Hollander experienced the following discouragement in attempting to become a trainee agent:
(1) Class member Hollander testified that Agent Ludwig did not take the prospect of class member Hollander becoming an agent serious because:
(a) He knew that State Farm had no women agents; and
(b) He believed a female application to then Agency Manager Manny Pirrone would be a waste of time.
(2) Class member Hollander testified that she spoke with Agency Manager Casselman because she knew of an opening in Mission Viejo in the summer of 1976. Casselman told her that seeking a trainee agent position as a woman would be “swimming against the current” ; that State Farm had a policy not to hire women; and that she would not be considered without a college degree. At trial, Agency Manager Casselman did not deny the conversation, but merely stated that he could not recall speaking with class member Hollander.
(3) Class member Hollander was never permitted to take the AIB or placed in a selection pool.
j. Class member Sharon Barnes testified that she worked for Career Agent Richard Ladderbrush from 1968 through 1979. See paragraph 111. She testified that as early as 1974, she was interested in becoming a career agent but met the following resistance:
(1) In 1974, she contacted Agency Manager McCarthy, who told her that State Farm did not hire women agents and that if she took the AIB she should not use the name Sharon and suggested that she use the name “Sam” or “Seymour.” When class member Barnes did take the AIB, she used the name S. McGee” to hide her sex.
(2) Class member Barnes testified that in 1978 she was told by Vance Basler that she could not become a trainee agent without a college degree; that an investment of $10,000 to $20,000 was required; and that the trainee agent position was not suitable for women because it was not appropriate for women to knock on doors.
[Lardie]
k. Class member Stella Lardie, secretary and office manager between the years 1977 and 1981 (see paragraph 111), testified that within six months of her employment as a secretary to career agent Red Coffman, she expressed her interest in becoming an agent. She was actively discouraged as follows:
(1) Agent Coffman never told her about the AIB or gave her any forms to fill out. Rather, he told her that she would need a college degree and substantial backing of between $15,000 and $20,000.
(2) Class member Lardie spoke with agency manager Art Kocherhans about becoming an agent. He did not inform her about the AIB nor did he refer to any other agency manager or say anything about the qualifications to become a trainee agent.
(3) Class member Lardie testified that Agency Manager Denny Duray did not take her direct expression of interest seriously, did nothing to encourage her, and did nothing to explain how to become a trainee agent.
(4) Class member Lardie testified that during Christmas 1980, she asked Agency Manager Dick Curtis what she should do to become an agent and about the possibility of filling the vacancy soon to be created by the retirement of Agent Coffman. Agency Manager Curtis responded that she would need a college degree, that she was not qualified, and that she was not serious enough. She testified that Agency Manager Curtis did nothing to explain how to become a trainee agent.
(5) Class member Lardie testified that she never spoke to an agency manager again, never became a trainee agent, and is now a successful agent with Farmers Insurance Group. Lardie was never given an opportunity to take the AIB and was not placed in any selection pool.
[Outside Applicants]
164. In addition to the active discouragement of State Farm secretaries, office managers, solicitors and regional office employees from becoming trainee agents, women not employed by State Farm who applied or expressed an interest in trainee agency at the regional office were also actively discouraged, lied to, and misinformed about the nature and availability of trainee agent positions. The trial record is replete with examples of facially qualified women who were not permitted to pursue a career in trainee agency.
165. Despite claims of personnel employees at State Farm’s regional offices, such as John Peterson and Larry Nazry, that applications or resumes expressing an interest in sales were automatically forwarded to agency managers or agency directors, the experiences of class members indicated that such a practice was rarely, if ever, carried out.
166. Similarly, despite State Farm’s claims, as expressed by Messrs. Peterson and Nazry, that an applicant expressing an interest in sales during a regional office interview was automatically referred to an agency manager or agency director, the record reflects that such referrals were rarely made. For example:
a. Class member Linda Isler filled out an application to become a claims adjuster at the Rohnert Park Regional Office in 1980. After submitting her application, she phoned and expressed an interest in sales. She was asked if she had children; she was told that State Farm was not hiring agents; she was told that the trainee agent position required long hours and strenuous work; she was not given an AIB or any forms to fill out or referred to an agency manager or director; and she was never encouraged or told the positive things about a career in agency. She concluded that she felt “brushed off.”
b. Class member Karlene Taylor, in December 1979 or January 1980, applied to the Southern California Regional Office for a position in “sales.” She testified that John Peterson discouraged her by only pointing out financial problems, never indicating the possibility of an SMP, never discussing the possibility of training, never offering her the AIB, and never referring her to an agency manager or agency director.
c. Class member Judith Napier testified that in the spring of 1978, she went to the Southern California Regional Office looking for a position in marketing or sales. She testified that after expressing an interest in sales, she was told that State Farm was only looking for “newly graduated law students.” She further testified that she was never given the AIB or any forms to fill out and that she was never referred to any State Farm agency management employee. She testified that she felt discouraged and that she believed that State Farm was not hiring women in sales positions.
d. Class member Andrea Pardue who sought a position in sales at the Southern California Regional Office in November 1980 and who had a background as an insurance sales agent with the Automobile Club of Southern California, testified that the receptionist at the regional office told her that she would have to take a typing test. Thereafter, a receptionist instructed her to put down her interest in a clerical position. At the interview, Ms. Pardue testified that although she stated her interest in sales, she was again asked about her typing abilities and the interviewer kept referring to clerical positions. She was never offered the AIB, given any forms to fill out, or referred to any State Farm management employee.
e. Class member Alice Wright first expressed an interest in sales in April or May of 1979 while she was a sales representative for John Hancock Mutual Life Insurance. She called the Southern California Regional Office and was told to send a resume. She sent a resume and cover letter but received no response. She was not given the AIB or any forms to fill out and was not referred to any State Farm management personnel.
Ms. Wright again expressed an interest in becoming a sales agent with State Farm in January 1981 when she sent a resume, cover letter, and application to the Southern California Regional Office. She again received a rejection letter stating that there were no openings. Again, she was not offered the AIB or any forms to fill out and was not referred to any State Farm management personnel.
f. Class member Janet Boyd-Good testified that in February or March, 1979 she contacted the Southern California Regional Office about a position in sales. She testified that she was told by the Southern California Regional Office that she would have to “start out in a clerical position,” relocate, and take a cut in pay. She felt discouraged. She was never asked to take the AIB, fill out any form, or referred to any State Farm agency management personnel.
g. Class member Linda Neves testified that in January 1980 she had an interview in the Northern California Regional Office where she expressed an interest in sales. She was interviewed by State Farm Regional Office employee Larry Nazry. According to Ms. Neves, Mr. Nazry mentioned but never offered her the AIB; never gave her any forms to fill out; and never referred her to an agency manager or agency director. Ms. Neves testified that during the interview she was told “State Farm only hires once a year.”
167. The active discouragement of women interested in becoming trainee agents contrasted with the active encouragement of males by State Farm agency managers, agency directors, and other State Farm management personnel. The trial record is replete with examples of such active encouragement of male prospects. For example:
a. Deputy Regional Vice President Raker testified that when he recruited for the position of trainee agent, he used State Farm’s Career Presentation (Plaintiffs” Exhibit 8-10) and portrayed the career as the “golden opportunity.”
b. State Farm Agency Manager Gerald E. Estabrook testified that he was recruited by State Farm agent Skip Crank to be a trainee agent in 1974. Mr. Estabrook testified that he was encouraged by Crank and told that it was an excellent opportunity to earn good income. Estabrook also testified that he was encouraged by Agency Manager Joe Fernandez and Career Agent Dennis Rosene. Mr. Estabrook concluded that by the time he decided to seek the position of trainee agent, he believed he could net $50,000 a year, have the opportunity to run his own business, and control his own time.
c. Agency managers such as Gerald A. Estabrook created expectations in male prospects far different than the expectations created by the active discouragement experienced by plaintiffs and class members. Agency Manager Gerald Estabrook testified to the expectations of males he personally recruited to be trainee agents. As examples:
(1) Edward Grist, appointed by Agency Manager Estabrook, at the time of his appointment believed he could earn $75,000 to $100,000 per year after five years.
(2) Charles Bott, appointed by Agency Manager Estabrook, was willing to give up a $75,000 per year job as an attorney because he felt he could do better as a State Farm agent.
(3) Recruit Mat Kelly, appointed by Agency Manager Estabrook, expected to earn $125,000 per year after five years as a State Farm agent.
(4) Recruit William Odeski, appointed by Agency Manager Estabrook, was willing to give up a $65,000 per year job after being recruited by Mr. Estabrook.
d. Agency Manager Don Wilson encouraged his son to become an agent despite the fact his son initially did not want to become an agent and was out of state.
168. The manner in which State Farm discouraged and deterred women from applying for the trainee agent position also contrasted with the written materials developed by State Farm and the light in which these materials cast the trainee agent position. As examples:
a. State Farm’s recruiting brochure “What’s Your Job Worth? Half Your Life?” (Plaintiffs” Exhibit 8-7) described the agent position as providing “a future and a career that few other fields could offer.” The brochure promised a chance for advancement, high income potential, and a dynamic field “on the move” that “keeps pace with the times.” The brochure also promised “security to its agents” and a feeling of “contribut[ing] to the welfare of others.”
b. State Farm’s Career Presentation (Plaintiffs” Exhibit 8-10) used by State Farm in its recruitment, selection and hire of trainee agents in both the Initial and Final stages (Plaintiff’s Exhibit 8-11), painted the trainee agent position in glowing terms without a negative comment. The career presentation promised:
(1) The opportunity for increased income each year and to advance rapidly;
(2) Security through “[a]n endless market for your services, [w]ell known, highly regarded product, [p]ersonal help in getting started with complete training, and [a]ggressive promotional backup” ;
(3) Satisfaction because “[o]f contributing to the welfare of others” and “[s]pecial recognition by your community and your associates....”
(4) The Career Presentation asked “How many positions can you think of that would offer you a better way to build your career? Would you settle for anything less? With State Farm you won’t have to.”
(5) The Career Presentation promised that “[n]o financing is required” and that State Farm provided “financial assistance to give you a financial floor of stable income.” The Career Presentation assured candidates that State Farm help[s] you every step of the way.”
(6) The overall effort required in becoming an agent was simply described: “It’s easy.”
169. The active discouragement of women seeking positions as State Farm trainee agents has distorted the number of female AIB test-takers, ensuring the gross under-representation of women in the agency sales force.
State Farm’s Application of Multiple Subjective Criteria in Plaintiffs” Recruiting, Selecting and Hiring of Trainee Agent Excludes Women From Sales Positions
170. Although there were no objective qualifications for the position of trainee agent, State Farm applied multiple subjective criteria when recruiting, selecting and hiring individuals for the position of trainee agent.
171. In defendants” Memorandum in Opposition to Plaintiffs” Motion for Class Certification, defendants catalogued some of the subjective criteria which were used in the recruitment, selection and hire of trainee agents. These subjective criteria included:
a. “The desire ... to establish, then manage an independent insurance business” ;
b. “The motivation ... to establish, then manage an independent insurance business” ;
c. “The ... requisite understanding to establish, then manage an independent insurance business” ;
d. “The requisite financial strength ... to sustain an independent business” ;
e. “The ... stability to sustain an independent business” ;
f. “A pattern of success in past endeavors” ;
g. “The ability to make a substantial investment to become a successful sales agent” ;
h. “Intelligence, leadership, technical ability and initiative” ;
i. Ability to make “extremely sensitive and subtle judgments” ;
j. The ability to withstand a “demanding career” ;
k. Excellence in “les service and administrative ability” ;
l. The ability to make “extremely difficult judgments” ;
m. “Organizational activities” ;
n. “Military service” ;
o. “Age, marital status, sport or hobby, income, number of children and occupation of friends” ;
p. “The type and amount of insurance owned” ;
q. “References” ;
r. “Work history” ;
s. “Ability to learn and retain material” ;
t. “Ability to meet people easily and relate well to them” ;
u. “Ability to plan well and establish realistic goals” ;
v. “Drive to work hard” ;
w. “Aptitude for insurance sales and potential to perform the duties of a State Farm agent” ;
x. “Interest in high income, security and the satisfaction of working as a private business person” ;
y. “Knowledge of the product” ;
z. “Completion of assignments in a timely manner” ;
aa. “Enthusiasm” ;
bb. “Proficiency in using the telephone and securing prospects” ;
cc. “Positive attitude” ;
dd. “Competitive attitude” ;
ee. “Willingness to sell to friends” ;
ff. “Makes a good first impression” ;
gg. “Direct contact with customers in previous jobs” ;
hh. “Relates well with interviewer” ;
ii. “Willingness to work at night and/or weekends” ;
jj. “Willingness to work independently” ;
kk. “Grades in school” ;
ll. “Educational history” ;
mm. “Active social life” ;
nn. “Physical activity” ;
oo. “Thoughtful and realistic about future” ;
pp. “Preserverance” ; and,
qq. “Good judgment.”
172. The trial testimony supports the finding and corroborates defendants” assertions in their Memorandum in Opposition to Plaintiff’s Motion for Class Certification that subjective criteria constituted virtually the sole basis for recruitment, selection and hire of trainee agents. In fact, trial testimony clarifies that there was no consistency to the subjective criteria applied; and that the subjective criteria used in any particular case would depend on the agency management employee making the particular decision. A representative sample of management testimony reflects the various laundry lists of subjective criteria used by agent management personnel in the recruitment, selection and hire of trainee agents.
a. Regional Vice President Roger Tompkins, after conceding that there were no objective qualifications for the position of trainee agent, listed “independence in business,” “initiative,” “integrity,” “success pattern,” “intellectual capability,” and “willingness to stand the abrasion of dealing with the public” as the qualifications to become a trainee agent.
b. Deputy Regional Vice President Ray Wehde articulated his version of subjective criteria as “honesty,” “ability to sell,” and “occupationally disturbed” (defined by Ray Wehde as a person who perceived his own position as a “dead end job.”
c. Agency Manager Warren Buckingham testified that he was looking for someone “who can manage his own budget and live within his means,” “some education,” “success pattern,” “neatness,” “ability to communicate,” “sincerity,” “interest,” “inquisitiveness,” and “creativity.”
173. State Farm’s instructions to its agency managers with respect to the recruitment, selection and hire of trainee agents corroborated the subjective nature of the qualifications sought and the lack of definition or guidelines given agency managers in their application.
174. Plaintiff’s Exhibit 31, the “Agency Manager Pre-Contract Guide and Text” suggested, without definition or guideline, the following about the recruitment of trainee agents:
a. The individual was not to have “too little education” and has to “be able to absorb enough ideas to make sales efforts worthwhile.”
b. The “person must have that quality known as ‘stick-to-it-tiveness.’ ”
c. The agency manager was to be cautious of the person who “lived too highly” although a person with “ambition” was suggested. The agency manager was admonished that they were “not interested in the person with a champagne appetite and a coke ability.”
d. The agency manager was encouraged to look for prospects who are “energetic and active.” Individuals with negative attitudes toward the world were not desired.
e. The agency manager was urged to seek people who were “tolerant,” had “integrity,” and were “reliable.”
f. Ultimately, State Farm’s all male agency manager recruiting force was urged that “[t]he prospect must be a person that you like and respect. The prospect should be the kind of person from whom you would buy insurance.” (Chapter 2, p. 4)
175. Recruiting was governed by these subjective criteria that had neither specific fixed content nor called for discrete judgment, and whose relationship to one another was uncertain and discretionary. The definitions provided by defense management witnesses illustrate the complete lack of definition for each criterion and its uncertain and discretionary application. For example:
a. With respect to the financial investment required, Regional Vice President Tompkins testified that “no net worth was required.” While Regional Vice President Raker, Deputy Regional Vice President Wehde, and Agency Manager Buckingham agreed with the thrust of Tompkins” testimony, each had his own definition of financial investment. Raker testified “some money” was required. Wehde testified that a candidate needed someone to “bankroll him,” but provided no specificity as to the meaning of the phrase. Buckingham testified that he was looking for somebody who “could live within their means,” but then stated that there was no specific definition and that he relied instead on his “judgment” and “experience.” When asked about Buckingham’s phrase “live within their means,” Raker testified that he could not define it.
b. With respect to educational requirements, the testimony is consistent that no particular level of education was required to become a trainee agent. Nonetheless, different management personnel looked for different educational experience for different reasons in selecting trainee agent prospects. For example, Regional Vice President Raker testified that there were no educational requirements but that he “preferred college” because it showed an “ability to stick to and complete projects.” On the other hand, Agency Manager Soik testified that to be a successful trainee agent one did not need to complete even the eighth grade.
c. The clearest example of undefined multiple subjective criteria and their inconsistent and discretionary application was found in the definition of “success pattern.” The testimony is uncontradicted that “success pattern” was a subjective criterion that management personnel were instructed to look for in selecting trainee agents. Nonetheless, its definition was unclear. Agency Manager Buckingham testified that success pattern “can mean many things to many people.” Similarly, Regional Vice President Raker testified that success pattern “could mean a whole bunch of things depending on who you talk to.”
176. In sum, the combination of qualities required to qualify as a trainee agent was virtually without limit. As explained by Regional Vice President Raker, “which qualities [were] important [was] up to each of the agency managers.” As Deputy Regional Vice President Wehde put it, “One agency manager may feel a candidate is a winner, while another does not--it depends on the agency manager.” R.T. April 14, 1982, 314:8-11.
177. State Farm has never conducted a single study to validate any of the subjective criteria routinely applied in the recruitment and selection process by agency personnel.
Defendants” Claims Regarding Application of Multiple Subjective Criteria in the Recruitment, Selection and Hire of Trainee Agents
178. Defendants asserted in their Memorandum in Opposition to Plaintiffs” Motion for Class Certification and at trial that State Farm applied the aforementioned multiple subjective criteria during periods of Initial and Final Screening, the progress of which, defendants claimed, was recorded in an Agent Selection File maintained by the agency manager responsible for hiring a particular trainee agent.
179. Defendants claimed that the period of Initial Screening consisted of a preliminary interview; taking of the Aptitude Index Battery; the filling out of a personal history form; a selection interview; a reference check; an agency director interview; and an Initial Screening decision.
180. Defendants claimed that the Final Screening consisted of a health investigative report; a process of Career Presentation and Precontract Training; a Performance Expectation Conference; license study activity; agency director conference; and the filing of appointment papers.
181. State Farm further claimed that their managers recommended a particular candidate for selection to an agency director only after the candidate had been rigorously compared to at least three other candidates in a candidate selection pool. Thereafter, defendants claimed, the recommendation of the agency manager was reviewed by an agency director and finally approved by a deputy regional vice president.
182. The trial testimony however contradicts defendants” assertions with respect to the allegedly rigorous, fair, and consistent process for screening trainee agent candidates. In fact, trial testimony supports the conclusions that:
a. The application of the multiple subjective criteria was delegated without specific guidelines as to how to apply or evaluate them.
b. The lack of criteria increased the likelihood of inconsistency among the decision makers and the likelihood that the system would unfairly exclude women.
c. The sexual composition of the decision making group (primarily agency managers in conjunction with agency directors and deputy regional vice presidents) was entirely male until October 1981, when the first female agency manager was appointed.
d. The subjective criteria were applied without adequate safeguards to prevent against their arbitrary use.
The Manner in Which State Farm Selection Procedures Actually Operated
183. Defendants” claims with respect to the manner in which candidates were compared prior to selection were completely without merit.
184. The following facts in the trial record support this conclusion.
a. State Farm listed fourteen separate steps in its initial and final screening process, and, although elaborate forms existed to record an applicant’s progress through the selection process (see, e.g., Defendants” Exhibit 219.2), testimony of defendants” witnesses confirmed that there were no policies or guidelines as to the manner in which each stage was to be completed and that the process itself was generally not completed. For example:
(1) Deputy Regional Vice President Wehde testified that “most agency managers do not complete the selection interview guide as designed” and that “steps can be taken out of order at the discretion of the agency manager.” With respect to the manner in which to complete each stage, Wehde testified that it was discretionary with the agency manager. For example, he noted that the preliminary interview had to be completed to “the satisfaction” of the agency manager. He concluded that the decision whether or not to continue a candidate at each stage belonged to the agency manager and that no guidelines aided the manager in making his decision. As Wehde concluded: “State Farm has no policy regarding the comparing of candidates.”
(2) Similarly, Regional Vice President Raker stated that agency managers had “different standards” in completing the selection process.
In sum, defendants” so-called initial and final screening process amounted to a series of unmonitored, unregulated and undefined oral interviews, the completion of which depended almost entirely on the agency manager’s personal observation of and oral contact with the prospective trainee agent.
186. The agency manager had the discretion and ability to terminate the candidate at any stage of either the initial or final screening without review and based solely on his own subjective impressions. (See, e.g., Defendants Exhibit 219.1 indicating the complete discretion of the agency manager to terminate a prospective candidate at the preliminary interview and testimony of Agency Manager Warren Buckingham: “In the initial interview, you might formulate in your own mind that a person is not qualified.” )
187. Although State Farm claimed to use an elaborate “selection pool” process for the recruitment and comparison of trainee agent candidates, their actual use was virtually nonexistent. For example:
a. Regional Vice President Tompkins testified that there were no written guidelines and/or instructions on the use of selection pools.
b. Regional Vice President Tompkins testified that there were no records of selection pools.
c. Regional Vice President Raker testified that there were no written guidelines for the use of selection pools nor for the manner in which candidates were compared.
d. Deputy Regional Vice President Wehde stated that he did not know whether selection pools were used or ever monitored and that no records of the pools used existed.
e. Agency Manager Buckingham confirmed that as an agency manager, he knew of no criteria for the admission or nonadmission of a particular individual into a selection pool.
f. Not a single defense witness above the level of agency manager could testify as having seen records of a selection pool.
g. Even in those few instances in which a State Farm management employee testified to the existence of a selection pool, not a single writing exists in evidence documenting these pools or how the decision to select a particular person from a particular pool was made.
h. In fact, the record reflects that trainee agents were often preselected without the use of a selection pool. For example, Agency Manager William Gabbard committee himself to the appointment of Ron Greek and Stan Jones prior to his attaining the position of agency manager. See paragraph 163d. Similarly, Agency Manager Robert Carver created a special position for Randy Frager, son of State Farm Agent Norm Frager. See paragraph 163h.
No selection pools were used for these trainee positions.
188. In sum, although State Farm listed 14 separate steps in the evaluation of prospective trainee agents, it was virtually impossible to determine how and why a candidate advanced or failed to advance through the recruitment process.
189. The actual manner in which State Farm made these subjective decisions and the manner in which trainee agents were actually appointed, recruited, selected and hired, excluded qualified females in numbers disproportionate to their availability. State Farm’s decision-making process, in its reliance on the arbitrary subjective application of multiple subjective criteria accounted, in part, for State Farm’s nearly all male agency force.
Defendants Have Not Presented Evidence of Business Necessity
190. Defendants failed to present any evidence that the myriad of subjective criteria applied in the recruitment, selection, and hire of trainee agents was “job-related” or the result of business necessity.
191. Further, defendants have produced no evidence that the application of such criteria were predictive of or correlated with important elements of work behavior, necessary to the safe and efficient performance of the duties of a trainee agent, or imposed because of lack of acceptable alternative policies or practices.
192. Defendants produced no evidence that its multiple subjective criteria have been validated by “professionally accepted methods” as reliable indicia of future success as State Farm agents.
193. No evidence indicates that State Farm’s success as a casualty and fire insurance company and its high retention rate of agents resulted from the application of these multiple subjective criteria. State Farm’s success might just as well have resulted from good advertising, good claims service, and excellent products.
194. In this regard, Regional Vice President Tompkins testified that State Farm would be number one even if 50% of its agents were women, a clear indication that State Farm’s success does not depend on a 97% male sales force.
State Farm’s Reliance on Nepotism in the Recruitment and Selection Process Excluded Women From Positions of Trainee Agents
195. Since 1970, State Farm appointed large numbers of male relatives of incumbent trainee agents, career sales agents, agency managers, and agency directors to fill positions as trainee agents.
196. In fact, it was the stated policy of State Farm between November 1965 and November 1977 that State Farm looked with favor upon “sons and sons-in-law, brothers, brothers-in-law, and other close relatives of State Farm agents.” Exhibit A attached to Stipulation re Policy Statement Pertaining to the Employment/Affiliation of Qualified Relatives of Established Agents. That written policy also stated that more than 3% of the agency force were sons, sons-in-law, or nephews of State Farm agents and that over 11% of the local agency force were related to other agents, “the principal categories being brothers, brothers-in-law, and fathers and sons.” The statement concluded that “our purpose [is] to foster such relationships; we want more sons and relatives of our agents in the agency force.” It was not until November 1977 that State Farm revised this Policy Statement to include “daughters.”
197. The impact of defendants” policy favoring male relatives was reflected by statistics indicating the number of male relatives actually appointed and by numerous specific examples in the trial record of the appointment of male relatives of State Farm agents, agency managers, agency directors, and other State Farm management personnel. For example:
a. Three hundred eighty-three of the agents employed by State Farm during 1970 to 1981 had relatives in State Farm; of these 383 agents, 370 were male and only 13 (3.4%) were female. (Plaintiffs” Exhibit 2-8)
b. The trial testimony is replete with examples of the appointment of male relatives of incumbent trainee agents, career sales agents, agency managers, agency directors and other State Farm management personnel.
(1) Deputy Regional Vice President Ray Wehde approved the appointment of his son William as an agent in Monterey. The twin brother of Ray Wehde is a regional vice president in Illinois, and his brother-in-law is a State Farm agent in Washington.
(2) Regional Vice President Roger Tompkins testified that his father is A.W. Tompkins, an employee of State Farm for forty-one years, and now sits on the Board of Directors of the State Farm Life Insurance Company. Roger’s brother also is a State Farm regional vice president and his nephew is a field claims representative.
(3) Agency Manager Vance Basler testified that his brothers Paul and George, and his son-in-law Pat Padget are agency managers, and that his nephew Dave and his son-in-law Dave Fox are career agents.
(4) Don Fullerton testified that Jack MacInally was an agency manager, that Pat MacInally’s brother Jack is a career agent, and that two of Jack MacInally’s sons are agents.
(5) Agency Manager Warren Buckingham testified that he has appointed two sons of State Farm agents as trainee agents. Agency Manager Buckingham testified that he never appointed a female relative of an agent or any female at all.
(6) Agency Manager Gerald Estabrook testified that he appointed a brother of one of his incumbent agents to be a trainee agent.
(7) Agency Manager Ersel Smith testified that in 1975 he appointed the son of an agent to be a trainee agent and that he later appointed the son-in-law of that same agent to be a trainee agent.
(8) Agency Manager Richard Curtis testified that as deputy regional vice president, he approved the appointment of Glen Johnson, son of State Farm agent Larry Johnson; the appointment of William Cortland Lancaster, son-in-law of State Farm agent Hy Fegatil; and that he approved the appointment of Larry Pirrone, son of Agency Manager Manny Pirrone and nephew of Agency Manager Hugh Hagerty.
At the time of his appointment, William Cortland Lancaster had only $1,000 in the bank, had no college degree, no permanency in either residency or job experience, and was, in the words of Agency Manager Matt Madsen, “the weakest candidate he had ever presented to Mr. Curtis.” Plaintiffs” Exhibit 65-39.
(9) Career Agent Gary Orgill testified that he is the son-in-law of a State Farm agent.
(10) Agency Manager Don Wilson testified that he solicited the application of and appointed his own son Roger Wilson. See also Plaintiffs” Exhibit 63-65.
(11) Agency Manager Robert Carver testified that he appointed Randy Frager, son of State Farm Agent Norm Frager, as a trainee agent.
(12) Agency Manager Hollis Showalter testified that his cousin Earl Merker is a State Farm agent in Sanger, California.
198. The use of nepotism in the appointment of male trainee agents was common knowledge among women in operations, solicitors, office managers, agency secretaries and other women who seek employment with State Farm. For example, Barbara Bryley testified that she was well aware of the appointment of male relative Randy Frager to be a trainee agent.
199. As a result of State Farm’s reliance on male nepotism and the widespread knowledge of the use of male nepotism among women who might otherwise be interested in the position of trainee agent, the number of women AIB test-takers was distorted and decreased.
200. The extensive use of nepotism ensured that women were grossly under-represented in State Farm’s sales force.
Defendants Proposed “Applicant Flow Labor Pool” Consisting Solely of Women Who Took the Aptitude Index Battery Examination Is An Inaccurate and Distorted Measure of Availability
201. Defendants proposed exclusive use of a labor pool of women who took the AIB is inappropriate because it inaccurately measures the women available for the position of State Farm trainee agent. This assertion is supported by the following factors:
202. First, the term “applicant” has no meaning in the context of the recruitment, selection and hire of State Farm trainee agents because very few trainee agent candidates applied at all. Instead, State Farm recruited individuals and stimulated their interest in trainee agent positions in the hopes they would consider becoming agents. Regional Vice President Don Raker articulated this during the course of the trial:
The term applicant is not appropriate ... very few apply ... State Farm recruits [trainee agents], searches them out, digs them up.
203. Second, defendants” test-taker flow analyses based solely upon women who took the AIB, or any test-taker flow analysis does not take into account that certain State Farm agency managers would not hire women agents. For example:
a. On July 29, 1976, Deputy Regional Vice President Ray Wehde authored a memorandum stating that “some agency managers refuse to hire women agents. ...” Plaintiffs” Exhibit 88.
b. Agency Manager Linda Moore testified that “there probably are agency managers who won’t hire women.” She “hoped” that these managers would either “die or retire.”
204. Third, defendants” test-taker flow analyses do not take into account that State Farm maintained virtually no records of individuals, such as many class member witnesses, who expressed interest in becoming trainee agents but were not offered the opportunity to take the AIB. With respect to these women and State Farm’s lack of records, the trial testimony reflects the following:
a. Regional Vice President Raker testified without contradiction that there were no records of individuals who inquired about becoming trainee agents but did not take the AIB.
b. Regional Vice President Tompkins testified without contradiction that there was no way to know what coversations agency managers had with what individuals prior to taking the AIB. He further testified that agency managers were supposed to maintain records but that he had never seen any.
c. Agency Manager Warren Buckingham testified that he maintained no records of any individuals who expressed an interest in trainee agency if those individuals did not take the AIB.
d. The only records maintained by State Farm of individuals who expressed interest in becoming trainee agents but did not take the AIB are Declarations of Understanding maintained at each defendant’s regional office. Even with respect to these documents, however, the record is uncontradicted that they were of recent vintage and maintained for only short periods of time. Thus, Declarations of Understanding were maintained at the Northern California Regional Office only since 1977, and at the Westlake and Southern California Regional Offices only since 1979.
e. Messrs. Hal Smith, David Hunt, and Eric Hooker, State Farm’s Directors of Agency Administration at the Westlake, Southern California and Northern California Regional Offices, respectively, confirmed that the Declarations were the only records of individuals interested in becoming trainee agents who did not take the AIB and that these records only existed for short periods of time.
f. State Farm’s lack of records with respect to individuals expressing an interest in trainee agency who do not take the AIB was summarized by Deputy Regional Vice President Ray Wehde who stated: “There are no records of individuals who don’t sign the Declaration of Understanding or take the AIB and even the Declarations of Understanding were only used in the last few years.”
g. Because of the lack of records maintained by State Farm with respect to women interested in becoming trainee agents, it is impossible to determine the number of qualified women who may have been qualified for trainee agent positions and made application and inquiry, either by oral request or in writing.
h. Despite defendants” assertions to the contrary, Professor Drogin never assumed that defendants” AIB data tape was a complete record for purposes of measuring applicant flow. He never testified that the AIB data tape included data for persons not on the tapes--i.e., persons who applied but did not take the AIB test, persons who completed Declaration of Understanding forms but did not take the test, or women who were discouraged from taking the test. Even Dr. Singleton admitted that defendants” parity analysis only count AIB test-takers, not those who applied but did not take the test, or those who might have been discouraged from taking the test. (R.T., February 8, 1983, 42-45).
205. Fourth, test-taker flow analyses do not take into account defendants” recruitment practices that deterred and discouraged women from applying or expressing an interest in trainee agent positions. These discriminatory recruitment practices included:
a. Reliance on an essentially all male “word-of-mouth” “talking network” of “centers of influence” to locate trainee agent candidates. See paragraphs 134-37.
b. Failure to post descriptions and notices of openings for trainee agent positions. See paragraph 144.
c. Failure to advertise for positions as trainee agents. See paragraph 139.
d. Failure to recruit or seek trainee agent prospects from pools of candidates composed primarily of females, such as State Farm’s Operations Division or State Farm agency secretaries, office managers and solicitors despite the uncontradicted testimony by State Farm regional vice presidents that operations and agency employees constituted excellent sources of trainee agents. See paragraphs 146-47.
e. Reliance on nepotism which resulted in the hiring of male relatives. See paragraphs 195-200.
f. Perpetuation of an all male State Farm agent image in the advertisement of State Farm products and State Farm’s recruitment of trainee agents. See paragraphs 148-59.
g. State Farm’s reputation for not hiring women. See paragraphs 156-61.
206. Fifth, test-taker flow analyses do not take into account defendants” admissions that the number of female test-takers would be greater absent State Farm’s failures to recruit women. For example:
a. With respect to the recruitment of females, Deputy Regional Vice President Wehde testified that “the results are not as good as they could be.” He testified that State Farm did not do an adequate job of “selling the career opportunity to women.” He concluded that there “are more women out there” and that agency managers were “missing a bet in not hiring women.”
b. Although State Farm had an affirmative action plan for hiring women in operations positions, it had no such plan for hiring women as trainee agents.
c. Regional Vice President Tompkins testified that State Farm did not have a sufficient flow of women applicants.
d. Agency Manager Warren Buckingham admitted that in thirty-two years as an agency manager he never recruited a woman through any of his centers of infuence.
e. On February 10, 1978, Don Frischmann, Vice President Agency in the Manpower Development Division promulgated the document “Training the Trainer Topics.” Plaintiffs” Exhibit 28. The document directly admitted the impact of word-of-mouth recruitment by an all male agency management force on the number of women trainee agent recruits. See paragraph 137a.
f. The impact of State Farm’s recruitment and selection procedures on women test-taker flow is also implicitly acknowledged by defendants in their “Agency Manager Precontract Guide and Text.” (Plaintiffs” Exhibit 31) In Chapter Two, entitled “Candidate Identification,” the manual asked what constituted a qualified prospect; its answer confirmed the inevitability of obtaining male recruits because of State Farm’s recruiting practices. See paragraph 137b.
[Pre-Screening]
207. Sixth, test-taker flow analyses do not take into account the substantial amount of pre-screening that occurred prior to the time an individual took the AIB. The extensive pre-screening engaged in at State Farm is corroborated by the testimony of State Farm management agency employees and by documentary evidence prepared by plaintiffs and defendants.
a. Between 1970 and the time of trial, State Farm distributed a selection interview blueprint to its agency managers for use in the recruitment and selection of trainee agents. Although the selection interview blueprint changed over the years, every version utilized by State Farm included stages that preceded the taking of the AIB. At each step that preceded the taking of the AIB, the agency manager was given discretion to eliminate prospects from consideration. For example:
(1) Plaintiffs” Exhibit 9 (State Farm forms No. Z 5697.2) called for a “first interview” prior to the administration of the AIB. The agency manager was permitted to reject prospects at this first interview.
(2) Plaintiffs” Exhibit 13-1 (also Defendants” Exhibit 219.1) was a more recent version of the agent’s selection guide. It also called for a preliminary interview prior to administration of the AIB. The Preliminary Interview section of the Agent Selection Guide (a) outlined five activities to engage in during the Preliminary Interview; (b) required the agency manager to observe the applicant’s willingness to contribute time and invest capital; and (c) permitted the agency manager to discontinue the applicant prior to taking the AIB.
b. Agency Manager Warren Buckingham confirmed that during the initial or preliminary interview, an agency manager might formulate in his own mind that an individual was not qualified and discontinue the candidate from the selection process.
c. Taking the AIB commonly is preceded by a substantial amount of time spent with agency managers “explaining and discussing” and reading information about the trainee agent position. In fact, 76.1% of the male test-takers and 79.0% of the female test-takers between 1970-1981 and 89.6% of the male appointed agents and 95.7% of the female agents spent anywhere from one to five hours in “Pretest Discussion Time” before taking the AIB. Regional Vice President Raker testified that the pretest discussion time is used to tell applicants about the process and to sell the career.
d. There is also extensive pre-screening of individuals seeking to transfer from operations to agency. An individual expressing an interest in transferring from operations to agency may be denied the opportunity prior to taking the AIB. Before State Farm will approve administering the AIB to an operations employee, the individual must obtain the approval of both his supervisor and division manager. Only then is the AIB given. State Farm maintains no records of individuals screened out by supervisors and division managers in operations prior to taking the AIB.
208. Seventh, test-taker flow analyses are post hoc attempts to define the term applicant to suit defendants” needs. State Farm’s own documentary evidence does not support the definition of an applicant as an individual who takes the AIB. Indeed, such a definition of applicant was constructed solely for use in this trial. State Farm recruiting brochures, Agents Selection Guides, and the testimony of State Farm agency management personnel either do not define applicant as an individual taking the AIB or reject the term applicant altogether. For example:
a. Regional Vice President Raker testified that the term applicant was “not appropriate” at all because agency managers recruit, dig up and go out and talk to people, to find trainee agent candidates.
b. Regional Vice President Raker also testified that an applicant might be someone who takes the AIB or an individual might be an applicant before he takes the AIB. Raker testified that “sometimes lots of interviewing takes place before the AIB is taken.” During this time, Raker explained, a candidate is told about the process to “sell the career.”
c. Agency Manager Warren Buckingham testified that an individual was not an applicant until he or she took the AIB, completed the personal history form, entered a selection pool and submitted his letter requesting to become a trainee agent.
d. The Agent Selection Guide, Plaintiffs” 13-1 and Defendants” 219.1, both refer to a candidate taking part in a Preliminary Interview and signing the Declaration of Understanding prior to the taking of the AIB as applicants. Deputy Regional Vice President Ray Wehde was unable to explain the use of the term applicant in Defendants” Exhibit 219.1 in light of the definition of applicant proferred by defendants throughout the course of the litigation.
e. Similarly, defendants” recruiting brochure “Looking into a State Farm Agency Career?” (Plaintiffs” Exhibit 8-1) contains a Declaration of Understanding which is to be signed before the AIB is taken. The Declaration of Understanding contains a signature line for “applicants.”
209. Eighth, test-taker flow analyses do not take into account State Farm’s pattern and practice of discouraging and deterring women interested in applying to become trainee agents by ignoring them, lying to them, and/or giving them false and misleading information about the requirements for and possibility of becoming trainee agents. For example, women have been told of educational requirements that do not exist, financial requirements not founded in fact, and false information with respect to the availability and manner of application. See paragraph 162-66.
210. Ninth, test-taker flow analyses do not take into account the fact that State Farm subjectively applied multiple subjective criteria during the recruitment and selection process. See paragraphs 170-77.
211. All such decisions made by agency managers in the recruitment and selection of trainee agents prior to administration of AIB are made without guidelines and involve the application of subjective criteria. See paragraphs 178-94.
212. Tenth, test-taker flow analyses do not take into account expert opinion with respect to the use of test-taker flow data, such as that proferred by Dr. John Pencavel, which cautions that applicant flow data should be “used with extreme care.” See R.T. March 31, 1982, 103:17-20.
213. Dr. Pencavel testified that applicant flow data should only be used where:
a. Records of applications are complete both in terms of the number of applicants and the suitability of the individuals applying for the position;
b. Where there is a formal application process;
c. Where a significant amount of prescreening has not taken place; and,
d. Where individuals have not been deterred from applying by the hiring policies of the employer. R.T., April 1, 1982, pp. 331:18-333.
214. Dr. Pencavel testified that he was wary of applicant flow data because of the “active role” engaged in by the employer in “securing the potential sort of applicant he [the employer] wants which results in prescreening. (R.T., March 31, 1982, 104:3-16)
215. Dr. Pencavel testified that the reputation of a company for not hiring a particular group of individuals may also negatively impact the applicant flow with respect to that group of people. (R.T., March 31, 1982, 104:17-23)
216. Because of these factors, rather than measuring lack of discrimination, Dr. Pencavel concluded that “Applicant Flow Data may reveal the very discrimination that one is trying to determine whether or not it exists.” (R.T., March 31, 1982, 104:23-25)
217. Eleventh, test-taker analyses are flawed in that none of defendants” applicant flow analyses use the Declarations of Understanding preceding the AIB and in defendants possession and control throughout the course of the litigation. In light of the fact that many individuals expressed an interest in being a trainee agent but were not given the AIB (at least thirteen plaintiffs” witnesses so testified), the Declarations of Understanding preceding the AIB should be a more complete record of individuals interested in agency. Yet, defendants presented no evidence that the persons who signed the Declarations of Understanding were the same persons who took the AIB, the basis for their test-taker analysis.
[Flaws in Analyses]
218. Twelfth, defendants” test-taker flow analyses are further flawed in the following respects:
a. None of the defendants” statistical analyses are applicant flow analyses. Defendants” statistical exhibits measure only AIB test-takers. (Defendants” Exhibits 269.5, 269.6, 269.11, 269.12)
b. Defendants” witnesses, including Dr. Wayne Sorenson and Dr. Richard Singleton, admitted that defendants” “parity analyses” do not measure the following groups of applicants:
(1) All applicants in selection pools;
(2) Applicants who completed Declaration of Understanding forms but did not take the AIB; and,
(3) Applicants who discussed the trainee agent positions with agency managers, agency directors, and regional office personnel but who were not given the AIB.
c. Professor Pencavel testified that there is no precedent in the field of labor economics to support measurement of the availability of workers by counting test-takers.
d. Defendants” parity analyses are based on inaccurate assumptions and a statistically flawed model:
(1) Despite the fact that male applicants who failed the AIB were not eligible for appointment as trainee agents, defendants” parity analyses count all such men as eligible and available. This erroneous assumption artificially inflates the number of men available for trainee agent positions.
(2) Despite the fact that 1,353 trainee agents were actually hired during the period 1970-1981, defendants” parity analyses for this period include only 959 hires. Therefore, defendants” analyses omit 394 (29.1%) of the actual trainee agent hires during the 1970-1981 period.
(3) Despite the time lag between test taking and hire that frequently causes test-takers from one year to compete for trainee agent positions with test-takers from other years, defendants” parity analyses falsely assume that test-takers from each year compete only with people taking the test that same year.
e. Dr. Singleton conceded that any valid statistical model should fit defendants” actual employment practices as closely as possible, but the Sorenson/Singleton parity analyses do not fit State Farm’s actual hiring practices.
f. The testimony of defendants” expert, Dr. Singleton, corroborates the testimony of Dr. Pencavel that applicant flow more accurately reflects a company’s recruitment practices, not market labor availability. Thus, Dr. Singleton conceded that applicant flow is “a two-sided process” and that “either [there are applicants] coming forward themselves or they’re encouraged by the employer.” (R.T. Vol. VII 899:2-10) Dr. Singleton’s admission is consistent with the testimony of Regional Vice President Don Raker that:
The term applicant is not appropriate ... very few applied. ... State Farm recruits [trainee agents], searching them out, and digs them up.
219. If the inaccurate assumptions and statistical flaws in defendants” analyses are corrected, a comparison of State Farm trainee agent hires with the pool of test-takers reflects a statistically significant disparity between women hired as trainee agents and their availability in the pool of test-takers. For example:
a. Plaintiffs” Exhibit 2-17 is Professor Drogin’s “Comparison of Hires to Pool of Test-takers” and shows that despite the fact test-takers represent “only the tip of the iceberg” of female availability, a standard deviation of -2.59 is observed when test-takers are properly compared with trainee agent hires (significant probability less than 1 chance in 100).
b. Plaintiffs” Exhibit 2-17 is not subject to any of the criticisms which flaw defendants” test-taker flow analysis. For example, Professor Drogin’s analysis:
(1) includes all actual hires of trainee agents during 1970-1981;
(2) includes all women who took the AIB prior to its validation on April 19, 1978; and,
(3) considers the time lag between taking the AIB and date of hire. Despite defendants” criticisms to the contrary, Professor Drogin’s time estimates are not unrealistic; defendants, in their Memorandum in Opposition to Plaintiffs” Motion for Class Certification, argued a five-month average time lag between AIB test and hire and Professor Drogin selected a liberal twelve-month period;
(4) assumes that some trainee agents are hired immediately after taking the AIB (indeed, some are preselected before taking the AIB, e.g., appointments of Ron Greek and Stan Jones.)
c. Defendants” criticism that Professor Drogin failed to incorporate a six-month precontract period is without foundation in that defendants presented no evidence that precontract takes six months and Professor Drogin’s twelve-month “time window” includes it anyway.
220. Even defendants” statistical expert, Wayne W. Sorenson, conceded that the overall disparity between the 14.6% female AIB test-takers and the 7.0% female trainee agent hires during 1970-1981 was “statistically significant.” In fact, during 1970 through 1981, 19.8% (1258/6346) of the male AIB test-takers were hired as trainee agents, but only 8.8% (95/1083) of the female trainee agents were hired--a more than 2:1 disparity favoring males. (Plaintiffs” Exhibits 2-14 and 2-15)
Proposed Findings Re Plaintiff Muriel E. Kraszewski
221. From July, 1963 to June, 1969, plaintiff Muriel E. Kraszewski was employed as a secretary and office manager in the office of State Farm Agents George Catling and Rolland Kienzle. Her responsibilities included filing loss reports, explaining insurance coverages and quoting prices to customers and potential customers, completing insurance applications for customers, as well as secretarial and clerical duties. She performed her work well and was invited to return to work in the future if she chose to do so.
222. From June, 1969 to April, 1979, plaintiff Kraszewski was employed by Weatherby Insurance Company as a secretary to an executive vice president.
223. From April, 1970 to July, 1970, plaintiff Kraszewski was employed by Green & Leavitt, a general insurance agency. At Green & Leavitt she quoted prices, wrote insurance policies, and sold insurance, including commercial lines.
224. From July, 1970 to June, 1971, plaintiff Kraszewski was employed by State Farm Agent Charles Clayton. At Clayton’s agency, she explained insurance coverage to potential customers, quoted prices, wrote insurance policies, and solicited new insurance business.
225. In June, 1971, State Farm agent Larry Konecne asked plaintiff Kraszewski to work in his agency, where she continued to work until June 1974. At Konecne’s agency, plaintiff Kraszewski explained insurance coverages to potential customers, quoted prices, wrote insurance policies, solicited new business, as well as ran the agency during Konecne’s absences from the office. In June 1974, plaintiff Kraszewski went to work for State Farm agent William Grubbs as a solicitor, with the mutual understanding that she was pursuing a position as a State Farm trainee agent and that she would need time off work to pursue agency. As a solicitor for Grubbs, plaintiff Kraszewski did cold-calling and x-dating to prospective customers. Agent Grubbs testified that her work for him included “selling” State Farm insurance.
226. Plaintiff Kraszewski made numerous attempts to become a State Farm trainee agent. In Spring of 1974, she expressed her interest in becoming a State Farm agent to Agency Director Eugene Miller, Agency Managers Robert Carver and Manny Pirrone, and State Farm agent Larry Konecne.
227. Agency Director Eugene Miller and Agent Larry Konecne told her that State Farm did not hire women agents. Miller later referred her to Agency Manager Pete Adrience regarding a possible opening in a high income area in South Pasadena. She did not contact Adriance, nor did Adriance contact her.
228. Plaintiff Kraszewski approached Agency Manager Robert Carver at a training session for State Farm secretaries, and expressed her interest in becoming a State Farm agent. He told her that she was well qualified, but that he did not have any extra files and therefore was not hiring trainee agents. He did not offer her an opportunity to take the AIB nor put her into an agent “selection pool.”
229. After being refused by Carver, plaintiff Kraszewski told Agency Manager Matt Madsen that she wanted to become a State Farm agent. Madsen told her that it would be difficult for State Farm to hire a woman agent because they had no way of protecting women and that he had no files and could not hire her. He did not give her the AIB or put her into an agent selection pool.
230. Plaintiff Kraszewski next contacted Agency Manager Manny Pirrone, told him of her interest in becoming a State Farm agent, and asked to take the AIB. Agency Manager Pirrone said he did not have any AIB tests. Thereafter, Agency Director Miller contacted plaintiff Kraszewski, told her that Agency Manager Pirrone would let her take the AIB, and told her to contact Pirrone. She did contact Pirrone, and took and passed the then unvalidated AIB.
231. Plaintiff Kraszewski then contacted Agency Manager Lou Matz and expressed her interest in becoming a State Farm agent. Matz said that he could not appoint trainee agents without some files to give trainee agents to work on, that he had no files, and therefore no openings. Matz advised her to complete a Confidential Personnel History form, but did not give her the AIB nor place her in a selection pool.
232. Plaintiff Kraszewski also contacted Agency Director Don Fullerton about her interest in becoming a State Farm agent. Fullerton neither gave her the AIB test, nor placed her in any selection pool.
233. Plaintiff Kraszewski spoke with Agency Director Eugene Miller four times regarding her interest in becoming a State Farm agent, the last time in March 1975, at the Southern California Regional Office. At this time, Miller told her that State Farm would not hire her because she did not have a college degree, had not demonstrated that she could run her own business and was unwilling to relocate. Plaintiff Kraszewski replied that many State Farm agents did not have college degrees, that she could do the work, and that no one had offered her a trainee agent position to relocate to. Miller acknowledged that many State Farm agents did not have college degrees, but stated that a college degree was a new requirement.
234. All plaintiff Kraszewski’s contacts with Agency Directors Miller and Fullerton, and Agency Managers Carver, Madsen, Pirrone and Matz were initiated by Kraszewski, except the March 1975 conversation with Miller. At that time, he called her into his office and told her State Farm would not hire her. Despite her repeatedly expressed interest in becoming a State Farm agent, no State Farm agency manager, director or deputy regional vice president recruited her, encouraged her to pursue an agency career, nor placed her in an agent selection pool.
235. Plaintiff Kraszewski met all minimum objective requirements for the trainee agent position. Furthermore, at the time she applied for a trainee agent position, she had been a State Farm agency secretary, office manager, and solicitor for nearly twelve years, had successfully performed nearly all State Farm agent functions, had a net worth of approximately $104,000, had taken college level insurance courses, and had substantial contacts in the community. (Plaintiffs” Exhibit 84-5) Plaintiff Kraszewski understood that a State Farm trainee agent received a Specified Monthly Payment (SMP), but that there was some “risk” that such payments would not cover overhead and return a profit immediately. She was willing to accept any such “risk” to become a State Farm agent. In fact, she became a Farmers Insurance agent despite the greater risk there that she would have to pay back her monthly subsidy from Farmers if she failed as a Farmers agent (State Farm requires no pay back of the SMP for unsuccessful trainee agents).
236. In May 1975, after being turned away in her attempts to become a State Farm agent, plaintiff Kraszewski applied for and was appointed an insurance agent for Farmers Insurance Group. She has been and continues to be a highly successful insurance agent for Farmers. She frequently has been one of the top three Farmers agents in the Long Beach area.
237. Numerous trainee openings existed during the period plaintiff Kraszewski sought a trainee agent position. During 1974, State Farm hired 126 trainee agents in California; only one was female. (Plaintiffs” Exhibit 2-6) In 1975, State Farm hired 129 trainee agents; only six were female. (Plaintiffs Exhibit 2-6) In Los Angeles County, State Farm hired nine trainee agents during the period April 16, 1974 to July 1, 1975; all were male (Al Dijerlando, Larry Brady, Ken Anderson, Dave Pontecorvo, Leonard Hardtree, John Sinner, Bruce Bender, Robert Biby, and Glenn Higashida). (Plaintiffs” Exhibits 84-12 and 84-14) Moreover, in January 1975, shortly after he told plaintiff Kraszewski that he had no openings, Agency Manager Carver appointed Hope Yoder (male) to take over the open Conrad agency. Carver testified that he did not have an agent selection pool for the Conrad opening and that he did not consider plaintiff Kraszewski for this opening. Agency Manager Lou Matz appointed four male agents from April 16, 1974 to August 1, 1975 (Al Dijerlando, April 16, 1974; David Pontecorvo, January 1, 1975; Bruce Bender, May 1, 1975; and Larry Pirrone, August 1, 1975).
238. Defendants” claims that agency managers had to have existing files to give to trainee agents before a trainee agent could be appointed is pretextual. Numerous agency managers and agents testified that appointments were made without being given existing files. Perhaps the most prominent example is plaintiff Daisy O. Jackson, who received no files when appointed as a trainee agent. Trainee openings also were created for several male agents, including Randy Frager (son of State Farm Agent Norv Frager), Terry Lutz, and Roger Wilson (son of Agency Manager Don Wilson).
239. Defendants” claims that a college degree was required to become a trainee agent and that plaintiff Kraszewski was less qualified than males because she did not have a college degree are pretextual. According to Plaintiffs” Exhibit 2-9, only 46.7% of State Farm agents in California had bachelor’s degrees or above, 20.9% of the male agents had only high school degrees, and 7 male agents had not graduated from high school. This evidence was not contradicted at trial by defendants. In addition, four of the nine trainee agents appointed by State Farm within Los Angeles County between April 16, 1974 and July 1, 1975 did not have college degrees. (Plaintiffs” Exhibit 84-14) Moreover, Deputy Regional Vice President Robert Carver testified that some of his best producing agents did not have college degrees.
240. Defendants” claim that plaintiff Kraszewski was not hired as a trainee because she lacked “significant independent business experience” is not a requirement for hire as a trainee agent, and many male trainee agents are hired without it. (Plaintiffs” Exhibits 2-10 and 119) Furthermore, Deputy Regional Vice President Richard Curtis, who first asserted this defense in his letter to the California Fair Employment Commission (Plaintiffs” Exhibit 84-12), admitted that several of the trainee agent appointments he had approved were males without “significant independent business experience.” Glenn Johnson (son of State Farm Agent Larry Johnson) was 22 years old when appointed, had no sales experience, no independent business experience, and work experience as a tire installer, custodian, liquor clerk, and an office manager and solicitor in a State Farm Agency. (Plaintiffs” Exhibit 64-49). William Cortland Lancaster (son-in-law of State Farm Agent Hy Fegatil) was 24 years old when appointed, had no college degree, no permanency in either residence or employment, no independent business experience, only $1,000 in the bank, and was, in Agency Manager Matt Madsen’s words, “the weakest candidate he had ever presented to Mr. Curtis.” (Plaintiffs” Exhibit 65-39) Ken Anderson owed $27,000 to his father when appointed and his only independent business experience was in an aerospace business that went bankrupt. (Plaintiffs” Exhibit 63-2)
241. Defendants” claim that plaintiff Kraszewski was unwilling to commute or relocate to a trainee position is speculative. State Farm never offered her an opportunity to relocate or commute to a trainee position. Furthermore, plaintiff Kraszewski and her husband both testified that they had no objection to her commuting a substantial distance for a trainee agent position. The fact that plaintiff Kraszewski has commuted for nearly eight years from her home in Anaheim to her Farmers Insurance Agency in Long Beach confirms this testimony.
242. Defendants” claim that plaintiff Kraszewski was unqualified to become a trainee agent because her husband allegedly indicated that he was unwilling to allow her to work nights and weekends is pretextual. Plaintiff Kraszewski and her husband, Robert Kraszewski, denied that Robert had ever indicated that he would not permit his wife to work nights or weekends; both testified that she was willing to work nights and weekends as a State Farm agent and that husband Robert had no objections. This testimony was corroborated by the fact that shortly after being turned down by State Farm, plaintiff Kraszewski became an insurance agent for Farmers Insurance Group and frequently worked nights and weekends--without objection by her husband. Plaintiff Kraszewski continues to work nights and weekends as a Farmers agent--also without objection from her husband, who testified that he appreciated her earning capacity as an insurance agent.
243. Plaintiff Kraszewski testified that no State Farm agency manager, agency director or deputy regional vice president ever asked her if she was willing to work nights and weekends as a State Farm agent; the testimony of Deputy Regional Vice President Richard Curtis and Agency Manager Matt Madsen corroborates this testimony.
Proposed Findings Re Plaintiff Daisy O. Jackson
244. Plaintiff Jackson was employed by Career Agent Edward Borgia from April 1973 through December 1975 as an agency secretary and office manager.
245. The testimony is uncontradicted that between August 1973 and December 1975, plaintiff Jackson performed all Agent Borgia’s duties. During this time period, plaintiff Jackson was assisted by agency secretary Lorraine Reider. The testimony is uncontradicted that between August 1973 and December 1975, Mr. Borgia was rarely in the office because he was a full time practicing personal injury lawyer.
246. Former career agent and current Agency Manager Borgia testified that plaintiff Jackson performed each and every task of a State Farm agent while she was employed by him as office manager; that he was rarely in his agency office; that plaintiff Jackson occupied his office at the agency; and that on those rare occasions when he came to the office, he worked in the back room with the “dead files.”
247. Plaintiff Jackson was compensated based on the percentage of her sales. The compensation agreement between plaintiff Jackson and agent Borgia provided that plaintiff Jackson would receive 37 percent of the gross less 50 percent of the office expenses.
248. During the time that plaintiff Jackson acted as the agent at the Borgia agency, the agency thrived:
a. In 1974, agent Borgia won a trip to Europe based on the sales made by plaintiff Jackson and agency secretary Lorraine Reider.
b. In 1975, the Borgia agency ranked second among all agencies within the jurisdiction and control of Agency Manager Don Wilson. (Plaintiffs” Exhibit 99)
c. In 1975, the Borgia/Jackson agency was tied for number one in health sales (a traditionally difficult area of sales for State Farm agents) among all agencies within the jurisdiction and control of Agency Manager Don Wilson. (Plaintiffs” Exhibit 99)
d. Each year that plaintiff Jackson served as the de facto agent at the Borgia agency, the agency experienced a growth in all areas of sales. The consistent pattern of growth achieved by Agent Jackson is reflected in Plaintiffs” Exhibit 85-8.
249. Plaintiff Jackson first expressed an interest in becoming a trainee agent prior to April 1973 when she applied with agent Borgia to be his secretary/office manager. At that time, agent Borgia discouraged her and told her that “she could make more as his secretary,” and that she should stay with the Borgia agency rather than seek a trainee agent position of her own.
250. At the time of plaintiff Jackson’s hire by agent Borgia, plaintiff Jackson was trained by agent Borgia’s agency manager Don Wilson. Plaintiff Jackson testified that the training which she successfully completed consisted of the same precontract training provided prospective agents.
251. During her training in 1973, plaintiff Jackson asked Agency Manager Wilson about the possibility of becoming an agent. He told plaintiff Jackson that she was better off remaining a secretary in the Borgia agency and that State Farm was not hiring women agents. He concluded that the type of individuals State Farm was looking for were “young men who had college degrees who could become managers.”
252. Agency Manager Wilson’s testimony confirms that he told plaintiff Jackson that he was looking for young married men with college degrees who could progress to management; that he felt secretaries were better off remaining with their agents rather than becoming agents themselves; that he preferred not to take a good secretary from an agent; and that he liked to see wives of agents act as secretaries for their husbands.
253. Despite the fact that Agency Manager Wilson was aware of plaintiff Jackson’s interest in becoming an agent, he did not inform her of available trainee agent positions. In fact, within six months of his 1973 conversation with plaintiff Jackson about her interest in becoming a trainee agent, one of Agency Manager Wilson’s agents, George Seifert, died. Although Agency Manager Wilson intended to fill the position created by the death of Agent Siefert, he never informed plaintiff Jackson regarding its availability. Intead he appointed his son, Roger Wilson, to fill the Seifert position, effective June 1, 1974. (Plaintiffs” Exhibit 63-65)
254. Agency Manager Wilson testified that Roger was living out of state, did not have any community contacts, and had to be persuaded to return to California to accept the trainee agent appointment.
255. Plaintiff Jackson next inquired about being a trainee agent in early 1975 when she learned that agent Borgia was being considered for the position of Agency Manager.
256. At that time, she asked agent Borgia about becoming an agent if, in fact, he became an agency manager. Agent Borgia informed Ms. Jackson that:
a. She needed a college degree;
b. State Farm frowned on making secretaries agents; and,
c. It was against State Farm’s policy to hire women agents because women could not do the job.
257. In May or June 1975, plaintiff Jackson testified that while inspecting a property in Woodside with agent Borgia she again inquired about becoming an agent. At this time, agent Borgia told her that “insurance is like law and medicine, no one wants to talk to a woman.”
258. In the spring of 1975, plaintiff Jackson was finally permitted to take the AIB, nearly two years after her first inquiries about agency with agent Borgia and Agency Manager Wilson.
259. Plaintiff Jackson was appointed trainee agent effective February 1, 1976.
260. On January 5, 1976, just prior to plaintiff Jackson’s appointment, newly appointed Agency Manager Borgia recommended plaintiff Jackson to his Agency Director Jay Butler as follows:
Daisy has a unique gift for selling and gaining the confidence of people. Her ability to work is awesome.... I believe Daisy has the potential of becoming the greatest female agent in the Company and one of the best agents in any category. (Letter Borgia to Butler, January 5, 1976. Plaintiffs” Exhibit 85-13)
261. Six weeks after appointment as agent, plaintiff Jackson attended defendants” Personal Selling Skills School (PSS). On March 18, 1976, while returning from PSS school, plaintiff Jackson suffered a pulmonary embolism described as a blood clot in the lung. Plaintiff Jackson’s pulmonary embolism destroyed the lower one-half of one lung and left her in a coma for a week.
262. Plaintiff Jackson remained in the hospital for two weeks and was released during the first week in April 1976.
263. Against doctors” orders, plaintiff Jackson returned to work the third or fourth week in April. Plaintiff Jackson testified that she disregarded her doctors” order because she feared that her failure to return to work would jeopardize her position as a trainee agent.
264. During the first week in May of 1976, plaintiff Jackson returned to the hospital with a recurrence of her pulmonary problems. She remained in the hospital for one week.
265. Upon her release from the hospital in May, plaintiff Jackson testified that she again ignored her doctors” orders and returned to work because she feared she might lose her trainee agent position.
266. Plaintiff Jackson’s fears were well-founded. Despite the fact that her production records (numbers of policies sold) had been impacted by her serious illness in every month of her trainee agency save the month of February 1976, Agency Manager Borgia testified that he told plaintiff Jackson in mid-June 1976 that she would be terminated within 90 days unless her production increased.
267. In fact, Agency Manager Borgia, in concert and with the approval of his Agency Director Butler and Deputy Regional Vice President Wehde terminated plaintiff Jackson in July 1976, only 30 days after the 90-day probationary period began.
268. Agency Manager Borgia testified that he did not take plaintiff Jackson’s illness into account when he terminated her. Agency Manager Borgia testified that he still did not know what had been wrong with plaintiff Jackson.
269. Agency Manager Borgia claimed that the reason for the termination within 30 days of plaintiff Jackson’s supposed 90-day probationary period was that plaintiff Jackson committed acts of “gross insubordination.”
270. Agency Director Butler similarly testified that he did not take plaintiff Jackson’s illness into account when he approved her termination. Agency Director Butler testified that the decision to terminate plaintiff Jackson had “been in his mind” long before Agency Manager Borgia terminated her.
271. Deputy Regional Vice President Wehde ultimately approved the termination of plaintiff Jackson. Wehde testified that he took her illness into account, but that he approved the termination because her production was down. During the course of his testimony, Deputy Regional Vice President Wehde never mentioned Borgia’s stated reason for Jackson’s termination, i.e., alleged “gross insubordination.”
272. In sum, the testimony reflects that the termination of Daisy Jackson was not justified on the basis of “gross insubordination,” but rather on alleged lack of production.
Defendants” rationale for the termination of plaintiff Jackson was pretextual. In fact, plaintiff Jackson was terminated because she is a female, in violation of 42 U.S.C. 2000e et seq.
273. The pretextual nature of the stated reasons for the termination of plaintiff Jackson is evidenced by a comparison with her male counterpart, Michael Bonasera, who was also terminated because of poor production after a serious illness. A comparison of plaintiff Jackson with Bonasera reflects the following:
a. Bonasera was appointed trainee agent by Agency Manager Roy Soik in defendants” northern region in May 1975, nine months prior to plaintiff Jackson. He was terminated in November 1976. Deputy Regional Vice President Ray Whede was ultimately responsible for approving the termination of both plaintiff Jackson and Bonasera.
b. Bonasera did not become ill until the sixth month of his trainee agency. Still, Bonasera’s production fell below “minimum expected” levels in four of his first five months as a trainee agent (-33.3% the first month, -57.9% the third month, -30.0% the fourth month, and -61.5% the fifth month. Letter to Deputy Regional Vice President Ray Wehde and Agency Director Mark Walp from Agency Manager Roy Soik dated November 24, 1975 and part of Plaintiffs” Exhibit 64-97, also Defendants” Exhibit 91).
c. During the first five months of his trainee agency male comparable Bonasera was not disciplined or placed on probation by the company despite the fact his production was down 33.3 percent. (90 applications expected/60 actually written)(Plaintiffs” Exhibit 64-97)
d. In his letter to Messrs. Walp and Wehde, Mr. Soik noted that Mr. Bonasera suffered a serious illness in the sixth month of his trainee agency (October 1975) and stated that Mr. Bonasera might have to be terminated if he did not turn his production around in November and December 1975. (Plaintiffs” Exhibit 64-87) Agency Manager Soik also noted that Bonasera’s life volume “is one of the lowest we’ve experienced for a new trainee....”
e. Bonasera did return to work until February 1976. At that time, Agency Manager Soik testified that Bonasera no longer had “health problems.” Nonetheless, in February 1976 his production was off 18.2% and in March his production was off 34.6%. Despite the fact that Bonasera’s production had been down a total of six of the seven months he was a trainee agent, Agency Manager Soik testified that he still did not consider terminating him. He testified that he wanted to be “absolutely sure” before he took action.
f. In April, 1976, Bonasera’s production was off 38.5% and only then did Agency Manager Soik place agent Bonasera on 90 days probation.
g. Bonasera received an additional eight months before he was finally terminated in November 1976. Agency Manager Soik testified that he told Bonasera “three strikes and you’re out.”
h. Deputy Regional Vice President Wehde approved the termination of Agent Bonasera as he had the termination of plaintiff Jackson.
i. Both plaintiff Jackson and Bonasera did not validate in the first month of their trainee agency. Long term Agency Manager Soik testified that failure to validate in the first month of trainee agency or in the first six weeks was not a concern because “you need 12-16 weeks to be established as a trainee agent.”
j. Bonasera was given “three strikes” and nineteen months to prove himself as a trainee agent, including five months of poor production before he became ill and an additional four months of poor production after he recovered from his illness. Plaintiffs” Exhibit 64-97; Defendants” Exhibit 91.
k. On the other hand, plaintiff Jackson was terminated after only six months in spite of the fact that she was ill and/or in the hospital for 4-1/2 of those months. The only period in which plaintiff Jackson was healthy and working as a trainee agent was the first sixth weeks of her trainee Agency which Agency Manager Soik testified should not be a concern because of the 12-16 weeks it takes to establish one’s self as an agent. Plaintiff Jackson was never permitted to have 12-16 weeks to establish herself when she was healthy. The long term concern exhibited for Bonasera was totally lacking for plaintiff Jackson.
l. There is no jurisdiction for the difference in treatment between Bonasera and plaintiff Jackson. In fact, other attacks leveled at plaintiff Jackson during the course of the trial (e.g., lack of organization, failure to set priorities) were the same criticisms leveled at Bonasera by Agency Manager Soik in his testimony at trial. See Plaintiffs” Exhibit 64-97.
274. In addition, plaintiff Jackson was treated differently than her male counterparts in the following manner:
a. She was not given files to help her start her agency by Agency Manager Borgia. Instead, Borgia gave files to two male agents, McClure and Wallace, who he appointed at the same time, and a third male agent Chris Roden. The files given these males were, in fact, files sold by plaintiff Jackson while she ran Agency Manager Borgia’s agency and he practiced law full time.
b. Plaintiff Jackson was given an isolated office in South Palo Alto whereas new Agents McClure and Wallace were permitted to share office space with Agency Manager Borgia in downtown Palo Alto where potential business was greater and where they could share expenses and lessen any financial burden in the beginning months of their agency.
275. Plaintiff Jackson was hired as a sales agent by Farmers Insurance Group subsequent to her termination and was a successful Farmers agent.
276. Plaintiff Jackson was not appointed to the position of trainee agent before 1976 because she is a woman. In fact, plaintiff Jackson was qualified to become a trainee agent as early as November 1973.
Proposed Findings Re Plaintiff Wilda Tipton
277. Plaintiff Wilda Tipton has been employed as a secretary and office manager in two State Farm agencies in the Oxnard-Ventura area since 1967.
278. At the present time, plaintiff Tipton is employed by State Farm Career Agent John Carman for whom she has worked since 1980.
279. Between 1967 and 1980, plaintiff Tipton was employed by State Farm Career Agent William Bremmer as a secretary, office manager and solicitor. During the nearly thirteen years that plaintiff Tipton was employed by agent Bremmer, she performed virtually all the duties of a career agent including the sale of State Farm’s multiple lines of insurance, both inside and outside the office.
280. Specifically, plaintiff Tipton, who received her solicitor’s license in 1966, sold auto, fire and health insurance as well as life insurance outside the office when accompanied by Agent Bremmer.
281. Agent Bremmer recognized that plaintiff Tipton’s sales of insurance merited additional compensation. As a result, he paid plaintiff Tipton based on a percentage of the business sold by the Agency.
282. Agent Bremmer testified that plaintiff Tipton’s work performance was excellent and confirmed that she solicited business in and out of the office.
283. Plaintiff Tipton first expressed an interest in becoming a State Farm agent in 1969. At that time, while employed by Agent Bremmer, she spoke with Agent Bremmer’s agency manager, Mr. White. Plaintiff Tipton testified that Mr. White informed her that it was “not possible [for her to become an agent]” and that he “didn’t want to talk about it.” Plaintiff Tipton testified that after these conversations with Mr. White she believed it was impossible for her to become an agent.
284. Plaintiff Tipton next inquired about becoming an agent in 1974 when she spoke with agency manager Wes Hicks who had replaced Mr. White as Mr. Bremmer’s agency manager.
285. Although Agency Manager Hicks permitted plaintiff Tipton to take the AIB, she testified that Hicks discouraged her and told her that her chances were “not very good.” In addition, he told plaintiff Tipton that a two year college degree was required to become a trainee agent.
286. Agency Manager Hicks also told plaintiff Tipton that his agency director did not believe plaintiff Tipton could “compete with other people in the pools.” During the course of the trial, defendants never specified who the agency director was, the underlying facts upon which the agency director based his “negative response,” or the selection pool and individuals therein with whom plaintiff Tipton supposedly could not compete.
287. Nonetheless, plaintiff Tipton continued to be interested in becoming an agent and told Agency Manager Hicks that she would get the degree he stated was required.
288. After her 1974 conversations with Agency Manager Hicks, plaintiff Tipton returned to school and completed 50 units. In addition, plaintiff Tipton completed several insurance industry courses.
289. Between 1974 and 1978 Agency Manager Hicks appointed six agents in the Oxnard-Ventura area: Donald Koeberle, 9/1/74; Robert Greene, 11/1/74; John M. Derr, 1/16/75; James J. Beatty, 6/1/75; William Busch, 7/1/76; and Isaac Taylor, Jr., 1/1/77. Plaintiff Tipton was never informed of these openings.
290. In 1978, plaintiff Tipton asked Agency Manager Hicks whether she could be considered for an opening that existed in the Oxnard-Ventura area.
291. Agent Bremmer testified that he heard about plaintiff’s interest in the opening and called Agency Director Vern Gallagher to tell him that he strenuously opposed plaintiff Tipton’s appointment.
292. Agent Bremmer testified that his opposition was based on his fears that plaintiff Tipton would steal his files. On cross-examination, Agent Bremmer could not provide a single example of any disloyalty or dishonesty on the part of plaintiff Tipton or provide any other evidence to substantiate his fears. Agent Bremmer admitted that he had never opposed the appointment of a male agent.
293. Agency Manager Hicks was aware of Agent Bremmer’s opposition to the appointment of plaintiff Tipton in 1978. He also testified that despite plaintiff Tipton’s acknowledged interest in filling the vacancy, he did not consider her or allow her to compete for the opening. Agency Manager Hicks articulated no reason why he did not consider or permit plaintiff Tipton to compete for the vacancy.
294. Instead, in April 1978, Agency Manager Hicks appointed a male, Steve Abrahams, as trainee agent. Abrahams was only 26 years old at the time of his appointment and had no prior sales experience.
295. Agency Manager Hicks testified that a selection pool existed for the Abrahams” appointment although he could not specify anyone in it. In any case, he testified that plaintiff Tipton was in the pool “in name only.”
296. Mr. Abrahams was terminated within a year because of poor performance.
297. In June 1978, after Agency Manager Hicks refused to consider plaintiff Tipton for the vacancy filled by Mr. Abrahams, plaintiff Tipton and her husband Otis Tipton met with Agency Manager Hicks and Agency Director Vern Gallagher regarding the possibility of plaintiff Tipton becoming a trainee agent.
298. At the meeting, Gallagher acknowledged that he was aware of Agent Bremmer’s opposition to the appointment of plaintiff Tipton in the Oxnard area. Agency Director Gallagher told plaintiff Tipton that because of Agent Bremmer’s opposition, she would not be appointed in the Oxnard area.
299. Agency Director Gallagher also told plaintiff Tipton that Agent Bremmer’s opposition aside, the Oxnard area was saturated with agents and that no further appointments would be made there.
300. Gallagher’s statement regarding Oxnard appointments proved to be untrue. In July 1979, Agency Manager Wes Hicks appointed Terry Lutz (male) to a trainee agent position in Oxnard.
301. Agency Manager Hicks candidly testified that despite his knowledge of plaintiff Tipton’s interest in the position he neither informed her nor considered her for the position filled by Lutz.
302. Agency Manager Hicks testified that the reason he refused to permit plaintiff Tipton to compete for the position was that he had wanted to appoint Lutz in 1978 and “felt bad” that he had not. Hence, he appointed him in 1979. Hicks concluded that he felt no need to contact plaintiff Tipton because he believed Lutz to be qualified.
303. Agency Manager Hicks” failure to permit plaintiff Tipton to compete for the 1979 Oxnard vacancy was the second time he had filled a trainee agent position in the Oxnard-Ventura area without considering plaintiff Tipton--the first time being in 1978 when he appointed Steven Abrahams as a trainee agent.
304. Thereafter, Agency Director Gallagher referred plaintiff Tipton to Agency Manager Robert Larkin who was filling vacancies in the Simi Valley area.
305. Plaintiff Tipton testified that she met with Agency Manager Larkin on two separate occasions in September 1978.
306. At the first meeting, Agency Manager Larkin asked plaintiff Tipton about relocating and working nights. Plaintiff Tipton informed Agency Manager Larkin that she would consider relocating and that she would work nights. Plaintiff Tipton testified that after the first meeting she was not hopeful of receiving an appointment.
307. At the second meeting, arranged at the request of plaintiff Tipton, plaintiff Tipton brought her husband Otis because she felt Agency Manager Larkin had been very unsupportive at the first meeting.
308. During the course of the second meeting the issues of night work and relocation again were discussed. Plaintiff Tipton again indicated that relocation was possible and that she was willing to work nights. Plaintiff Tipton testified that after the second meeting she was not hopeful of receiving an appointment.
309. At the second meeting, plaintiff Tipton testified that Agency Manager Larkin told her that most of his agents were men and that this would present a problem for plaintiff Tipton. He also stated: “Women can’t handle this position.”
310. Plaintiff Tipton’s husband, Otis, who was the former Chief of Police of the City of Oxnard, corroborated plaintiff Tipton’s account of the second meeting with Agency Manager Larkin.
311. After the conclusion of the second Larkin meeting, plaintiff Tipton attempted to contact Agency Manager Larkin but without success. Plaintiff Tipton testified that Agency Manager Larkin did not return calls; that she was discouraged; and that she believed she was being “strung along.”
312. Plaintiff Tipton testified that when she discovered that Lutz had been appointed she was furious and contacted plaintiffs” counsel who had just filed this action on behalf of plaintiffs Kraszewski and Jackson.
313. Plaintiff Tipton is currently employed as a State Farm agency office manager, is qualified to be a trainee agent, and remains available for appointment as a trainee agent.
314. Plaintiff Tipton was not appointed as a trainee agent because she is a female.
The Requirements of Rule 23 are Satisfied
315. The action is properly certified as a Rule 23(b)(2) class action.
316. The facts pertinent to the class allegations herein are as follows:
Numerosity
317. During the period 1970 to 1981, 1083 women took the Aptitute Index Battery of tests at State Farm.
318. The 1083 women who completed the Aptitude Index Battery examination satisfy the numerosity requirements of Rule 23.
319. In addition, thousands of women were deterred and/or actively discouraged from applying for the position of trainee agent by State Farm’s recruiting policies, State Farm’s all male image, State Farm’s arbitrary application of multiple subjective criteria by its predominantly male management force, State Farm’s misrepresentation of the availability of and requirements for trainee agent positions to interested women, and State Farm’s use of nepotism.
Commonality
320. Plaintiffs” actions raise the following questions common to the entire class:
a. Whether or not there were women qualified for trainee agent positions within the population and/or labor force;
b. Whether or not such women have been denied equal recruitment and selection opportunities for trainee agent positions;
c. Whether State Farm has violated the rights of plaintiffs and plaintiffs” class by delegating to predominately male supervisors the discretion to make subjective determinations with respect to the recruitment, selection and hire of trainee agents.
321. Commonality is also supported by the centralized nature of State Farm’s personnel system. This centralization is reflected in the following facts:
a. State Farm in theory utilizes a uniform Selection Interview Blueprint, Personal History Form, and Agent Selection Guide in selecting trainee agents. These selection documents were developed at State Farm’s home office.
b. Trainee agents enter into a uniform employment contract, called the “State Farm Agency Building Plan.”
c. All trainee agents are subject to a minimum two-year training program.
d. All trainee agents solicit only State Farm products.
e. The responsibility for recruitment, selection and hire of trainee agents is shared by all members of management, including agency managers, agency directors, deputy regional vice presidents and regional vice presidents.
f. The final authority to select trainee agents is centralized--exercised at the highest level of management.
322. The nature of the unlawful employment practices--the failure to recruit and select women as sales agents--is one that has affected and continues to affect a large number of women.
323. Class membership is highly homogeneous, as only women are included and only one job captionposition--trainee agent--is at issue. Plaintiffs” action is not an across-the-board case involving hundreds of diverse job positions brought by plaintiffs on behalf of sexual and multi-racial classes.
324. The length of time span covered by the allegations is 1974 through the present. The recruitment and selection process and the recruitment and selection criteria for trainee agents have remained essentially the same throughout this period.
Typicality
325. Plaintiffs” individual and class allegations are nearly identical.
326. In fact, testimony of each of the individual plaintiffs as well as the sixteen class members who testified at trial, revolves around the same consistent theme--they attempted to become trainee agents but were lied to, misinformed, and discouraged in their efforts to attain the entry level sales position.
327. The legal theory upon which both individual and class allegations are being pursued is identical.
328. The relief sought for the individual plaintiffs and class members is identical.
329. The major focus of plaintiffs” individual claims is on defendants” deterrence and failure to recruit, select and hire women as State Farm trainee agents.
330. The exclusion focus of this lawsuit and trial is one job captionposition--trainee agent.
331. Plaintiff Daisy O. Jackson’s claim is typical of other class members despite the fact she was eventually appointed to the position of State Farm trainee agent. Ms. Jackson, sought to become a trainee agent for nearly three years before her actual appointment. As with the other plaintiffs and class members, she was lied to, misinformed, and discouraged in her efforts to become a State Farm sales agent. See paragraphs 244-72.
Adequacy of Representation
332. Plaintiffs” counsel are qualified, experienced, and generally able to conduct the litigation effectively.
333. The interests of plaintiffs are in no way antagonistic to those of the class.
334. The individual allegations of plaintiffs are consistent with the statistical portrait of State Farm set forth herein.
335. The relief prayed for in the Complaint will benefit plaintiffs and the class alike.
336. The interests of Daisy O. Jackson do not conflict with the class despite the fact that she is a former State Farm trainee agent.
337. In fact, Ms. Jackson was treated in precisely the same way as the other plaintiffs and class members in her efforts to become a trainee agent.
338. There is no evidence of collusion warranting a finding that the interests of the plaintiffs or class counsel are antagonistic to the class.
339. The fact that plaintiffs Kraszewski, Jackson and Tipton may seek employment with State Farm in the future does not make their interests antagonistic to class members currently employed by State Farm since the alleged antagonism is merely speculative rather than actual.
Applicability of Rule 23(b)(2)
340. Plaintiffs” action challenges defendants” employment practices--i.e., recruitment, selection and appointment policies and practices for the position of State Farm trainee agent.
341. Plaintiffs seek declaratory and injunctive relief on a classwide basis to end defendants” discriminatory employment practices. In addition, plaintiffs seek monetary relief on behalf of class members who suffered discrimination.
342. Defendants” actions of discrimination have affected the entire class.
343. The monetary relief sought by plaintiffs on behalf of the class is equitable in nature in that discrimination is alleged on a classwide basis, injunctive and declaratory relief are sought to correct those discriminatory practices and monetary relief is sought pursuant to the “make whole” remedies of Title VII.
344. To the extent that any of the following Conclusions of Law are deemed to be Findings of Fact, they are incorporated herein by reference.
Conclusions of Law
To the extent any of the foregoing Findings of Fact are deemed to be Conclusions of Law, they are incorporated herein by reference.
1. This court has jurisdiction of this action pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e-5 -(f)(3), 28 U.S.C. §1343(3) and §1343(4). Venue lies properly in this District pursuant to 28 U.S.C. §1319(b) and (c) and 42 U.S.C. §2000e-5(f)(3).
2. Defendants are “employers” within the meaning of 42 U.S.C. §2000e-5(b) . Court’s May 13, 1983 Order Denying Defendants” Motion to Dismiss; Lutcher v. Musicians Union Local 47 [24 EPD ¶31,402 ], 633 F.2d 880, 883 (9th Cir. 1980); Sibley Memorial Hospital v. Wilson [6 EPD ¶8964 ], 488 F.2d 1338, 1341 (D.C. Cir. 1973); Spirit v. Teachers Insurance and Annuity Association [20 EPD ¶30,177 A], 475 F. Supp. 1298, 1308 (S.D.N.Y. 1979).
3. Pursuant to Federal Rule of Civil Procedure 23(b), this action was appropriately maintained as a class action on behalf of all female applicants and deterred applicants who, at any time since July 5, 1974, have been, are, or will be denied recruitment, selection and/or hire as trainee agents by defendant companies within the State of California. The Court is satisfied that all the requirements of the rule, including numerosity, commonality, typicality, and adequacy of representation have been met. See, Gibson v. Local 40, Supercargoes & Checkers [12 EPD ¶11,215 ], 543 F.2d 1259, 13 FEP Cases 997 (9th Cir. 1976); Social Services Union v. County of Santa Clara, 21 FEP Cases 684 (9th Cir. 1979); Ellis v. Naval Air Rework Facility [10 EPD ¶10,257 ], 404 F. Supp. 291, 13 FEP Cases 1782 (N.D. Cal. 1975); Gay v. Waiters Union, Local 30 [14 EPD ¶7541 ], 549 F.2d 1330, 14 FEP Cases 995 (9th Cir. 1977); Harriss v. Pan American World Airways, Inc. [15 EPD ¶8011 ], 74 F.R.D. 24, 15 FEP Cases 1640 (N.D. Cal. 1977); Wofford v. Safeway Stores, Inc., 18 FEP Cases 1645 (N.D. Cal. 1978); Bernardi v. Bergland, 18 FEP Cases 1180 (N.D. Cal. 1977); Walthall v. Blue Shield of California [15 EPD ¶7973 ], 16 FEP Cases 626 (N.D. Cal. 1977); Martinez v. Bechtel Corp. [10 EPD ¶10,570 ], 11 FEP Cases 898 (N.D. Cal. 1975); Pate v. A.C. Transit, 21 FEP Cases 1227 (N.D. Cal. 1979). The Court finds no reason to decertify the class certified on September 9, 1981. Kraszewski v. State Farm Insurance Co. [30 EPD ¶33,302 ], 27 FEP Cases 27 (N.D. Cal. 1981). Plaintiffs” claims are common to and typical of the class claims and the class is appropriate in light of General Telephone Co. v. Falcone [24 EPD ¶31,247 ],--U.S.--, 28 FEP Cases 1745 (1980).
[Statistical Evidence]
4. Statistical evidence played a major role in this action. The use of such evidence is clearly appropriate, for statistical analysis has always served an important function in Title VII litigation. Teamsters v. United States [14 EPD ¶7579 ], 431 U.S. 324, 339, 14 FEP Cases 1514 (1977); Hazelwood School District v. United States [14 EPD ¶7633 ], 433 U.S. 299 (1977); O’Brien v. Sky Chefs, Inc. [28 EPD ¶32,549 ], 670 F.2d 864, 28 FEP Cases 169 (1982); United States v. Ironworkers Local 86 [3 EPD ¶8213 ], 443 F.2d 544, 3 FEP Cases 496 (9th Cir. 1971). Statistics alone often have been found sufficient to establish a prima facie case of employment discrimination. Dothard v. Rawlinson [14 EPD ¶7632 ], 433 U.S. 321, 15 FEP Cases 10 (1977); Kelly v. American Standard, Inc. [25 EPD ¶31,612 ], 25 FEP Cases 94 (9th Cir. 1981); Gibson v. Local 40, Supercargoes & Checkers, supra; Kaplan v. IATSE [10 EPD ¶10,504 ], 525 F.2d 1354, 11 FEP Cases 872 (9th Cir. 1975); Davis v. County of Los Angeles [15 EPD ¶8046 ], 566 F.2d 1334, 16 FEP Cases 396 (9th Cir. 1977), vac. on other grounds [19 EPD ¶9027 A], 440 U.S. 625, 19 FEP Cases 282 (1979).
5. Plaintiffs” statistical evidence utilized appropriate measures of population, workforce, and labor market availability and is supported by prevailing Title VII case law. Teamsters v. United States [14 EPD ¶7579 ], 431 U.S. 324 (1977); Hazelwood School District v. United States [14 EPD ¶7633 ], 433 U.S. 299 (1977); Heagney v. University of Washington [25 EPD ¶31,685 ], 26 FEP Cases 438 (9th Cir. 1981); Piva v. Xerox Corp. [27 EPD ¶32,147 ], 26 FEP Cases 1267 (9th Cir. 1981); O’Brien v. Sky Chefs [29 EPD ¶32,881 ], 28 FEP Cases 1690 (9th Cir. 1982); Lynn v. Regents, University of Calif. [27 EPD ¶32,149 ], 656 F.2d 1337, 28 FEP Cases 410 (9th Cir. 1981); United States v. Ironworkers, Local 86 [3 EPD ¶8213 ], 443 F.2d 544, 3 FEP Cases (9th Cir. 1971); Gibson v. Local 40, Supercargoes & Checkers [12 EPD ¶11,215 ], 543 F.2d 1259, 13 FEP Cases 997 (9th Cir. 1976); Davis v. County of Los Angeles [15 EPD ¶8046 ], 556 F.2d 1334, 16 FEP Cases 396 (9th Cir. 1977), vac. on other grds. [19 EPD ¶9027 A], 440 U.S. 625, 19 FEP Cases 282 (1979); Kaplan v. IATSE [10 EPD ¶10,504 ], 525 F.2d 1354, 11 FEP Cases 872 (9th Cir. 1975); Smith v. Union Oil of California [17 EPD ¶8411 ], 17 FEP Cases 960 (N.D. Cal. 1977); LULAC v. City of Santa Ana [11 EPD ¶10,818 ], 410 F. Supp. 873, 12 FEP Cases 651 (C.D. Cal. 1976).
6. Defendants” subjective recruitment and selection practices strengthen the inference of discrimination from plaintiffs” statistical data. Lynn v. Regents, University of Calif. [27 EPD ¶32,149 ], 656 F.2d 1337, 27 FEP Cases 410 (9th Cir. 1981); O’Brien v. Sky Chefs [28 EPD ¶32,549 ], 28 FEP Cases 1690 (9th Cir. 1982); Houston v. Inland Marine Industries [30 EPD ¶33,296 ], 29 FEP Cases 557, 558 (N.D. Cal. 1982); Rowe v. General Motors [4 EPD ¶7689 ], 457 F.2d 348, 4 FEP Cases 445 (5th Cir. 1972); Brown v. Gaston County Dyeing Machine Co. [4 EPD ¶7737 ], 457 F.2d 1377, 1382-83, 4 FEP Cases 514, 518-19 (4th Cir. 1972), cert. den. [5 EPD ¶8021], 409 U.S. 982 (1972); United States v. Hazelwood School District [11 EPD ¶10,854 ], 13 FEP Cases 1161 (8th Cir. 1976); Davis v. Califano [21 EPD ¶30,363 ], 21 FEP Cases 272 (D.C. Cir. 1979).
7. The availability data “refinements” sought by defendants are unprecedented and unjustified. DeMedina v. Reinhardt [30 EPD ¶33,015 ], 686 F.2d 977, 29 FEP Cases 1084 (D.C. Cir. 1982); Trout v. Hidalgo [25 EPD ¶31,753 ], 517 F. Supp. 873, 28 FEP Cases 641 (D.D.C. 1981), aff’d [31 EPD ¶33,437 ], 31 FEP Cases 286 (D.C. Cir. 1983); Vuyanich v. Republic National Bank of Dallas [26 EPD ¶32,106 ], 521 F. Supp. 656, 26 FEP Cases 1127 (N.D. Tex. 1981).
8. The statistics presented by plaintiffs regarding defendants” sales force composition and hiring rates were compelling. These statistics included the following: In 1974, when plaintiff Kraszewski began to actively seek a trainee agent position, State Farm’s California sales force was 99.9% male (1414/1416); in 1975, when her charges of discrimination were filed, defendants” sales force was 99.6% male; at the end of 1981, defendants” California sales force remained 96.5% male. State Farm hired no women agents in 1970, 1971, 1972, 1973, and only one in 1974 and 1977 (two women hired out of 695 trainee agent new hires). During the period 1970 through 1981, only 7.0% of the trainee agent new hires were women (95/1353).
Defendants” hiring rates and workforce composition fall far short of the availability of women in the population and California civilian labor force, as testified to by Professor John Pencavel, a labor economist, and create a prima facie case of discrimination. Teamsters v. United States, supra; Hazelwood School District v. United States, supra; Dothard v. Rawlinson, supra; Gibson v. Local 40, Supercargoes & Checkers, supra; Kaplan v. IATSE, supra; Davis v. County of Los Angeles, supra; LULAC v. City of Santa Ana, supra; Piva v. Xerox Corp., 26 FEP Cases 1367, 1971 (9th Cir. 1981).
9. The Court rejects defendants” proposal to rely exclusively on AIB test-takers as the measure of female availability for the trainee agent position for the following reasons: (1) Defendants” test-taker flow data was not complete in that records for all applicants were not maintained, particularly oral applications; (2) Evidence of discriminatory recruitment practices and word-of-mouth recruitment by all-male managers; (3) Defendants” failure to post job notices or advertise job openings; (4) Nepotistic recruitment and selection practices that heavily favored males; (5) Differential use of subjective recruitment and selection practices; and (6) Defendants” active discouragement of female applicants and misleading and noninformative responses to inquiries by women. Dothard v. Rawlinson, supra; Blake v. City of Los Angeles [19 EPD ¶9251 ], 545 F.2d 1367, 1375, 19 FEP Cases 1441, 1446 (9th Cir. 1979); Gay v. Waiters Union, Local 30, 22 FEP Cases 280 (N.D. Cal. 1979) aff’d [30 EPD ¶33,026 ], 30 FEP Cases 605 (9th Cir. 1982); Development Labs, 13 FEP Cases 772 (N.D. Cal. 1976); Robinson v. Union Carbide Corp. [12 EPD ¶11,179 ], 13 FEP Cases 654 (5th Cir. 1976); Williams v. Owens-Illinois, Inc. [28 EPD ¶32,404 ], 27 FEP Cases 1273, 1279-80 (9th Cir. 1982).
10. In addition to the compelling statistical evidence of a pattern and practice of discrimination presented by plaintiffs, the Court finds that the testimonial evidence of specific acts of discrimination corroborate the statistics, and, in the words of the United States Supreme Court, “brought the cold numbers convincingly to life.” Teamsters v. United States [14 EPD ¶7579 ], 14 FEP Cases at 1514, 1520 (1977).
11. Plaintiffs” evidence established a prima facie case of classwide disparate treatment of women applicants and deterred applicants, which was not rebutted by defendants. Teamsters v. United States [14 EPD ¶7579 ], 431 U.S. 324, 14 FEP Cases 1514 (1977).
12. Defendants” recruitment and selection system, which relied primarily on word-of-mouth recruitment by all male managers, use of multiple subjective criteria, male dominated advertisements, and male nepotism had a disparate impact on women, as represented by the low percentage of female AIB test-takers and female trainee agent hires. Nanty v. Barrows [27 EPD ¶32,224 ], 660 F.2d 1327, 25 FEP Cases 410 (9th Cir. 1981); Wang v. Hoffman [30 EPD ¶33,174 ], 30 FEP Cases 703 (9th Cir. 1982); Peters v. Lieuallen [30 EPD ¶33,203 ], 30 FEP Cases 706 (9th Cir. 1982); Bonilla v. Oakland Scavenger Co. [30 EPD ¶33,128 ], 31 FEP Cases 50 (9th Cir. 1983); Paxton v. Union National Bank [30 EPD ¶33,055 ], 688 F.2d 552, 29 FEP Cases 1233, 1237 (8th Cir. 1982); Rowe v. Cleveland Pneumatic Co. [30 EPD ¶33,107 ], 690 F.2d 88, 29 FEP Cases 963 (10th Cir. 1981); Brown v. Gaston County Dyeing Co. [4 EPD ¶7737 ], 457 F.2d 1377, 4 FEP Cases 514 (4th Cir. 1972), cert. den. [5 EPD ¶8021], 409 U.S. 982 (1972); Vuyanich v. Republic National Bank [26 EPD ¶32,106 ], 521 F. Supp. 656, 662, 26 FEP Cases 1127 (N.D. Tex. 1981).
13. Defendants” failure to advertise or post job openings, and reliance instead on word-of-mouth recruitment by all male managers violated Title VII because it perpetuated the exclusion of women in defendants” sales force. James v. Stockham Valves & Fittings Co. [15 EPD ¶7842 ], 559 F.2d 310, 15 FEP Cases 827 (5th Cir. 1977); Senter v. General Motors Corp. [11 EPD ¶10,741 ], 532 F.2d 511, 12 FEP Cases 451 (6th Cir. 1976); Smith v. Union Oil of California [17 EPD ¶8411 ], 17 FEP Cases 960 (N.D. Cal. 1977).
14. Defendants” policy and practice of male nepotism in recruitment and hiring violated Title VII because of its disparate impact on women, 383 male relatives were hired as agents compared to only 13 females. Bonilla v. Oakland Scavenger Co. [30 EPD ¶33,128 ], 31 FEP Cases 50 (1983); Gibson v. Local 40, Supercargoes & Checkers [12 EPD ¶11,215 ], 453 F.2d 1259 (9th Cir. 1976); Pate v. A.C. Transit, 21 FEP Cases 1228, 1234 (N.D. Cal. 1979); Domingo v. New England Fish Company [16 EPD ¶8207 ], 455 F. Supp. 521 (W.D. Wash. 1977); United States v. Detroit Edison Co. [6 EPD ¶8890 ], 365 F. Supp. 86, 103 (D. Mich. 1973), aff’d [9 EPD ¶9997 ], 515 F.2d 301 (6th Cir. 1977).
15. Defendants” reliance on multiple subjective criteria in its recruitment, selection and hire of trainee agents had a disparate impact on women and therefore was illegal. Nancy v. Barrows Co. [27 EPD ¶32,224 ], 27 FEP Cases 410, 416 (9th Cir. 1981); Wang v. Hoffman [30 EPD ¶33,174 ], 30 FEP Cases 703 (9th Cir. 1982); Peters v. Lieuallen [30 EPD ¶33,203 ], 30 FEP Cases 706 (9th Cir. 1982); Smith v. Union Oil of California [17 EPD ¶8411 ], 17 FEP Cases 960 991-93 (N.D. Cal. 1977); Rowe v. General Motors Corp. [4 EPD ¶7689 ], 457 F.2d 348, 4 FEP Cases 445 (5th Cir. 1972); Satz v. ITT Financial Corp. [22 EPD ¶30,843 ], 22 FEP Cases 929 (8th Cir. 1980); Davis v. Califano [21 EPD ¶30,363 ], 21 FEP Cases 273 (D.C. Cir. 1979); Brown v. Gaston County Dyeing Machine Co. [4 EPD ¶7737 ], 4 FEP Cases 514 (4th Cir. 1972), cert. den. [5 EPD ¶8021], 409 U.S. 982 (1972); Houston v. Inland Marine Industries [30 EPD ¶33,296 ], 29 FEP Cases 557, 558 (N.D. Cal. 1982).
16. Defendants failed to prove by professionally accepted methods that its recruitment and selection practices and criteria were job related, predictive of or correlated with important elements of work behavior, necessary to safe and efficient job performance, and that no acceptable alternative policies or practices with less disparate impact were available. Blake v. City of Los Angeles [19 EPD ¶9251 ], 595 F.2d 1367, 19 FEP Cases 1441, 1447 (9th Cir. 1979); Craig v. County of Los Angeles [24 EPD ¶31,297 ], 626 F.2d 659, 24 FEP Cases 1105 (9th Cir. 1980); Contreras v. City of Los Angeles [25 EPD ¶31,728 ], 656 F.2d 1267, 29 FEP Cases 1045 (9th Cir. 1981); deLaurier v. San Diego United School District [18 EPD ¶8695 ], 588 F.2d 674, 18 FEP Cases 1148 (9th Cir. 1978); Uniform Guidelines on Employee Selection Procedures, 29 C.F.R. §1607.3(A) .
17. Defendants” consistent discriminatory treatment of female applicants, method of publicizing trainee agent positions, recruitment practices, negative responses to inquiries by women regarding sales positions, and the predominantly male composition of defendants” managerial force, operated to discourage and deter potential female applicants for trainee agent positions. Teamsters v. United States [14 EPD ¶7579 ], 431 U.S. 324, 14 FEP Cases 1415, 1531-32 (1977); Dothard v. Rawlinson [14 EPD ¶7632 ], 433 U.S. 321, 15 FEP Cases 10 (1977); Mitchell v. Mid-Continental Spring Co. [17 EPD ¶8588 ], 583 F.2d 275, 17 FEP Cases 1594, 1600 (6th Cir. 1978), cert. den. [19 EPD ¶9124], 441 U.S. 922; United States v. Ironworkers, Local 86 [3 EPD ¶8213 ], 443 F.2d 544, 3 FEP Cases 496 (9th Cir. 1971); Association Against Discrimination v. City of Bridgeport [21 EPD ¶30,321 ], 470 F. Supp. 101, 20 FEP Cases 985 (D. Conn. 1979), aff’d in part, vac. and rem. on other grounds [25 EPD ¶31,714 ], 647 F.2d 256 (2nd Cir. 1981).
18. Defendants” use of male dominated advertising perpetuated the image of the State Farm sales agent as all male, and contributed to State Farm’s reputation as a company that did not hire women sales agents. Wetzel v. Liberty Mutual Insurance Co. [7 EPD ¶9097 ], 372 F. Supp. 1146, 7 FEP Cases 34 (D. Pa. 1974), aff’d [9 EPD ¶9931 ], 508 F. 2d 239, 9 FEP Cases 211 (3d Cir. 1975), cert. den. [9 EPD ¶9942 ], 10 FEP Cases 1056 (1975); Morrow v. Crisler [3 EPD ¶8119 ], 3 FEP Cases 1162 (S.D. Miss. 1971), aff’d and rem. on other grounds [7 EPD ¶9237 ], 491 F.2d 1053, 7 FEP Cases 586 (5th Cir. 1974), cert den. [7 EPD ¶9237 ], 419 U.S. 845; United States v. Real Estate Development Corp., 347 F. Supp. 776, 782-83 (D. Miss. 1972).
19. Individual plaintiffs Kraszewski, Jackson and Tipton established prima facie cases of unlawful disparate treatment. The reasons articulated by State Farm for their adverse treatment were shown to be pretextual. McDonnell Douglas Corp. v. Green [5 EPD ¶8607 ], 411 U.S. 792 (1973); Texas Department of Community Affairs v. Burdine [25 EPD ¶31,544 ], 450 U.S. 248 (1981); Nanty v. Barrows [27 EPD ¶32,224 ], 660 F.2d 1327, 27 FEP Cases 410 (9th Cir. 1981); LULAC v. City of Salinas [26 EPD ¶32,067 ], 654 F.2d 557, 27 FEP Cases 409 (9th Cir. 1981).
20. Plaintiffs” statistical evidence of class discrimination reinforces the individual claims of plaintiffs Kraszewski, Jackson and Tipton. Heagney v. University of Washington [25 EPD ¶31,685 ], 642 F.2d 1157, 26 FEP Cases 438, 443 (9th Cir. 1981); Lynn v. Regents, University of California [27 EPD ¶32,149 ], 656 F.2d 1337, 28 FEP Cases 410 (9th Cir. 1981); Kyriazi v. Western Electric Co. [18 EPD ¶8700 ], 461 F. Supp. 894, 924 (D. N.J. 1978).
21. For the purposes of an award of costs and reasonable attorneys” fees, plaintiffs are the “prevailing party” within the meaning of 42 U.S.C. §2000e-5(k) .