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High Price of Job Bias

January 26, 1988

Sex discrimination can be expensive. For many years the denial of equal opportunity has deprived women of better wages. Now State Farm Insurance Co. must pay at least $1.3 million, and possibly millions more, because it denied 1,113 women's applications for sales jobs in California between 1974 and 1987. There is a lesson here for employers: It's far better to give everyone a chance to use his or her talents than to pay the price later for not doing so, both in lost sales and in legal settlements.

The story is all too familiar. The women whose suit against State Farm was just settled were told that they needed college degrees to get the higher-paying sales jobs; men were often hired to fill those jobs without college degrees. Women were told that they might have to move; men were not told that. The result: Women were passed up for jobs that often pay as much as $75,000 a year.

One of the plaintiffs, Muriel E. Kraszewski of Long Beach, now works for another insurance firm. She said that she filed a complaint in 1975 and joined in the suit four years later because she did not want others to be treated as she had been. In 1985 a federal judge ruled that the company, based in Bloomington, Ill., discriminated against women. This week the company agreed to pay Kraszewski, Wilda Tipton of Ventura and the estate of a Palo Alto woman $420,822 each. Women not specifically named in the suit must prove that they were better qualified than the men hired for the jobs that they sought before they can collect damages.

In reaching the settlement, State Farm did not admit to discrimination but said that it wanted to "leave the past in the past." The past, for women, meant that in 1979 there were 194 female agents and 13,279 males. The present figures are 1,810 female agents and 13,363 males in 1987.

To its credit, State Farm has for the last two years filled half of its new agent jobs with women and members of minorities. As part of the settlement, the company will continue that practice for the next 10 years.

This case puts employers on notice that they cannot use two sets of rules for recruiting and hiring--one set for men and another for women. It is unfortunate that it took a lawsuit. It will be fortunate when the climate in the country, not the courts, makes the practice of discrimination completely unacceptable as well as uneconomical.

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