Changing Policies : Female Would-Be Insurance Agents Collect

LOS ALAMITOS —  In 1979, with five years of assisting agents selling insurance policies under her belt, Carolyn Galbraith approached a State Farm Insurance Co. district manager and asked about becoming an agent herself.

He told her that she would need at least two years of college as well as $20,000 to become a sales agent of the company.

“I asked him, ‘What if I had both?’ ” the Los Alamitos woman recalled Wednesday. “He told me, ‘They wouldn’t hire you anyway because you’re a woman. We don’t hire women (as sales agents).’ ”

Still smarting from that rejection five years later, Galbraith in 1984 joined a then-pending class-action lawsuit filed by more than 800 other women who also alleged that State Farm did not hire them as sales agents because of their sex. About 200 of the plaintiffs were from Orange County, according to their attorney, Guy T. Saperstein.

In an announcement Wednesday, State Farm agreed to settle the case after 13 years of legal wrangling, paying each woman at least $150,000, making the $157-million total adjustment the largest civil rights case settlement in history. Most of the claimants received their settlement checks last week, according to attorneys in the case.

“This is the easiest money I’ve ever made,” said Galbraith, 51, who declined to say how much she received from the settlement during a telephone interview from her insurance office in Long Beach. The settlement “is not just about (money)--although it is a small pot of gold. It’s about the country needing to see that women should not be discriminated against.”

The settlement, announced in a press conference in San Francisco, is in addition to $36 million already recovered from the company in individual trials and agreements. Attorneys for both sides said this week that they welcome the settlement because it saves time and litigation costs.

The long-running case dates to 1975 when Muriel Kraszewski, 57, of San Clemente, then an office worker with a State Farm insurance office in Whittier, asked her district manager for an application for a sales agent’s job. She had been with the company for 12 years and had worked with sales agents in handling their accounts during that period, and therefore was qualified for the job, Kraszewski reasoned.

After stonewalling her request for a time, management later told Kraszewski the job could not be hers because she did not have a college degree--a requirement many of the male sales agents at that office also did not meet, she said.

In 1979, attorney Saperstein, who specializes in class-action lawsuits, agreed to handle Kraszewski’s case. He immediately filed a class-action suit on behalf of all women who had been discriminated against by State Farm because of their sex.

A U.S. District Court judge in San Francisco ruled in 1988 that State Farm was discriminating against women in its hiring practices and ordered the company to adjudicate the sex discrimination claims of more than 800 women employees who were denied jobs as agents from 1974 to 1987. Kraszewski, who went on to work as an agent for another insurance company, won $420,822 from the judge’s ruling.

Further negotiations led to this month’s mammoth settlement, the largest involving discrimination of any kind in a case brought under the 1964 Civil Rights Act, Saperstein said.

State Farm officials “were so sure that they were so right and that they were going to win because they’re so rich and powerful,” Kraszewski said this week. The settlement “just goes to show that if women feel we had been discriminated against, we should fight back.”

Colleen Cavanaugh, 60, of Anaheim said she is “elated” by the settlement. Cavanaugh, now retired, had been with a State Farm office for nine years when she asked a manager in 1976 for information about becoming a sales agent. She, too, was told that she needed a college degree and that since she didn’t have one, she should just keep working at the office as a secretary.

“I was doing everything from selling to managing claims to hiring and firing,” Cavanaugh said. “I was an agent without the title. I didn’t say or do anything about the rejection but continued working there because I felt I was alone.”

She added: “I didn’t realize women from all over the state were handed the same verdict (by management)--that we were not qualified mostly because we didn’t have a college degree, even as the men we were working under didn’t have a degree and were sales agents.”