Sunday, October 19, 2003

Discrimination case three years in the making

Since lawsuit, more women hired, promoted at Cincinnati Insurance

By James McNair
The Cincinnati Enquirer

At Cincinnati Insurance Co.'s 2,600-person headquarters compound in Fairfield and among the ranks of its 1,000-person national work force, men and women work alongside each other in virtually equal number. Peek into the company's executive ranks, though, and the picture changes.

Of the company's 150 officer-level slots, 85 percent are held by men.

Of the company's 43 senior officers, 88 percent are men.

Of the 16 board seats at parent company Cincinnati Financial Corp., 15 are occupied by men.

Nine female employees want that to change. Saying they are fed up with watching men pass them on the corporate ladder to higher positions with fatter paychecks, the women filed a federal class-action suit nearly three years ago in Indianapolis. The case pits would-be glass-ceiling busters against a company that is part of the nation's 17th largest property and casualty insurer.

The case also puts Cincinnati Insurance in the company of other major corporations - including Microsoft and Wal-Mart - that are accused of sex discrimination under federal equal opportunity and equal pay laws. A study conducted last year by Catalyst, a New York-based women's advocacy group, found that women's share of officer jobs in Fortune 500 companies has nearly doubled in seven years, but that share as of 2002 was only 15.7 percent, roughly what women accounted for at Cincinnati Insurance.

"The entire pay and promotion system at Cincinnati Insurance is in the hands of white males who very clearly take care of their own," said the plaintiffs' lawyer, Jennifer Graham of Indianapolis.

Not so, the company responds.

"The company is firmly committed to offering opportunities to men and women, equally, to develop and to be recognized for acquiring skills and business knowledge and providing high-quality service for our customers," company chairman and CEO John Schiff Jr. said in a statement faxed to the Enquirer.

The lawsuit was filed in December 2000 and is bogged down in pre-trial motions. In July, however, U.S. District Judge David Hamilton opened the unequal-pay portion of the case to 265 other women who worked in Cincinnati Insurance's claims and legal departments between Dec. 9, 1997, and March 22, 2002. Invitations were mailed last month, and individuals must respond and agree to be included in the expanded action.

Company lawyer goes to court

Leading the charge against Cincinnati Insurance is Arlene Rochlin. Rochlin, managing attorney for the company's claims office in Indianapolis, defends the company and its clients in claims cases and trials.

Rochlin's higher-ups praised her work as a trial lawyer, her case preparation and her one-time lobbying stint before the Indiana Senate. She won the company's top litigation award, the Grand Prize, in 1997 and was made a speaker at the twice-a-year meeting of company lawyers. In 1999, she rated a handwritten compliment from Schiff himself.

But Rochlin contends the pats on the back didn't come with commensurate financial rewards. She said she didn't receive the $2,500 annual raise that accompanied promotion to managing attorney until she asked for it. Then, after learning of a large pay disparity between herself and male peers, she told her supervisor and received an $8,500 raise.

More disturbing to Rochlin was her inability to enter the officer ranks. Rochlin, 47, said she was told in late 1997 that she was at the top of a "short list" of officer candidates and in November 1999 was still high on the list. But when a male lawyer with less experience, shorter tenure at Cincinnati Insurance and less time as a managing attorney than Rochlin was named an officer in 2000, she decided to investigate the company's promotion patterns and policies.

Rochlin said she learned that 13 of the company's 124 officers, or 10.5 percent, were women. Of the 53 senior officers, two, or 3.8 percent, were women. And while there were 11 male officers in the legal department's trial division, there were no female officers. Cincinnati Insurance gives a different head count of senior officers. It said there were 39 senior officers in 2000, of whom three, or 7.7 percent, were female.

As for promotion criteria, Rochlin said that she could find none in writing and her boss in Cincinnati told her there were no formal criteria. It's as far as she got.

"I asked the procedure for getting promoted and was told, 'We don't believe there is any useful purpose in providing you with that information," she said.

Woman joins the board

Rochlin took her complaint to the U.S. Equal Employment Opportunity Commission. The EEOC found reasonable cause and granted her the right to sue. She filed suit in December 2000, alleging sex discrimination in violation of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act. The suit, later amended to include eight claims from department employees who joined the case, seeks lost pay, punitive damages and legal costs.

The work, Rochlin says, does not require skills peculiar to men.

"It's psychology and math and marketing. It requires tenaciousness and intelligence, and I don't think any particular group has a monopoly on those particular skills. It's the skills, not the people."

In court, the company denied discriminating against women. Out of court, it went on a women-promoting binge. One of the first beneficiaries was Rochlin, who was promoted to associate counsel, an officer-level position, six weeks after filing suit. She remains managing attorney for the Indianapolis office.

In the almost three years since filing suit, Rochlin said she has heard from many female employees about a surge in hiring and promotion of women in the legal and claims departments.

It is perhaps most discernible in the upper ranks. Cincinnati Insurance says 22 - or 14.7 percent - of its 150 officers are women, compared with 13 of 124 - or 10.5 percent - in February 2000.

Meanwhile, Cincinnati Financial's all-male board of directors admitted its first woman last December - Gretchen Price, a vice president for finance and accounting and a former treasurer at Procter & Gamble Co.

CEO on the witness stand

Lisa Love, a senior company lawyer at the company's headquarters in Fairfield interviewed by the Enquirer, contends the company's low number of female executives is not an industry aberration.

"The number of women who are in officer positions at Cincinnati Insurance Co. is in line with other companies our size," she said.

As for the recent upward movement of women at Cincinnati Insurance, Love said it is not the result of the amendment of any policies or the launch of affirmative-action programs aimed at women. That the surge followed Rochlin's lawsuit, Love said, is coincidence.

"It's simply the development of people who worked their way through the ranks and achieved a level of success in their job performance," Love said. "The decisions about who is elected as officer are not made on the basis of gender."

Love, 43, would not discuss specifics about Rochlin or the other plaintiffs. She did, however, serve herself up as proof that the executive chambers at Cincinnati Insurance are accessible to women. Love was promoted to officer status in 1996 and to senior officer in February 2003. Her late father was a senior vice president of the company. She bristles at even the question of whether her promotion had any relation to her late father's association with the company. "I've worked very hard to achieve a level of success I've achieved with the company," she said. Gayle Louderback likewise believes she has worked very hard during a Cincinnati Insurance career that began in 1963. But Louderback, manager of the Life Claims department in Fairfield since 1986, maintains she is paid 10 percent less than a male counterpart and has been denied promotions she said she deserves. She joined Rochlin's lawsuit in 2001.

"I've worked hard, and I've taken all the courses to get promoted, and when you look around you and you see all these people getting promotions above you who haven't been there as long as you, and they're becoming senior managers and directors, it bothers me," said Louderback, 58.

Although the case is moving slowly, the plaintiffs have already put CEO Schiff on the witness stand, by way of deposition. Matters of promotion and pay are handled at the department level, he said under oath, and there is no "written outline" delineating officer qualifications. Asked about the allegations of disparate pay and promotions for women, Schiff responded by saying that his personnel department is "most qualified" to handle such grievances.

Schiff was also asked if the company has a policy against gender discrimination.

"I don't know," he said. "The responsibility for the formation and maintenance of such a policy is delegated to the Personnel Department," Schiff said in his deposition to the court.

The national picture

Cincinnati Insurance is not alone in finding itself confronted with allegations of discrimination against women. The roster of companies that have paid large sums to settle sex bias lawsuits since 1992 includes State Farm Insurance, Home Depot, Albertson's, Mitsubishi Motors, Chevron, Lucky Stores and Rent-A-Center. Similar suits are pending against giants Wal-Mart and Microsoft.

Jennifer K. Brown, legal director of the NOW Legal Defense and Education Fund in New York, cited a General Accounting Office study in 2001 that said for every dollar earned by a male manager in the finance, insurance and real estate industries in 2000, a female manager earned 68 cents, down from 76 cents in 1995.

"The composition of the people in the executive suites does not reflect the composition of the people in the cubicles," Brown said. "It suggests that the glass ceiling is persisting."

Why? "My gut feeling," she said, "is that women are being evaluated on different standards than men. They actually have to outshine their counterparts in order to advance. They have to be a star."

Arlene Rochlin remembers all too well being told she needed to "shine" to become an officer. "My promotion was incidental, and while that was important to me, I want this company to acknowledge the contributions and value of its female employees," Rochlin said.


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