Stacy Brown began working as an insurance agent for National Penn in 2002. In 2008, her department underwent a reorganization resulting in a change to her responsibilities (but not her compensation) and a move from a private to a shared office. Upset by those changes, Brown met with her manager, Maryanne Broemal, to ask why she was being moved without advance notice and to complain that the reorganization “was unfair.” At that meeting, Brown alleged, Broemal told her that National Penn believed its larger clients—who were shifted to a different group within Brown’s department as part of the reorganization—would prefer to deal with a male agent. Broemal denied making that statement.

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Around the same time, Brown was growing dissatisfied with the work David Ferrier, a contractor and National Penn customer, had been performing on her house over the previous few years. After Ferrier unsuccessfully tried to rectify the problems with the work, Brown decided to file an insurance claim with National Penn. Before doing so, she asked Broemal whether she could “put a claim in” for the damage and whether doing so would “jeopardize [her] job.” She did not, however, tell Broemal that she intended to access Ferrier’s confidential account information to file a claim on her own behalf without following normal procedures for filing claims. Accordingly, Broemal told Brown that filing the claim would not place her employment in jeopardy. After a similar conversation with another employee, Brown used National Penn’s computer system to access and obtain Ferrier’s information and file a claim for the damage to her house.

Days later, Ferrier contacted National Penn to complain that Brown had acted unethically in using his confidential information to file a claim without his knowledge and without following standard claim-filing procedures. After investigating Ferrier’s complaint, National Penn determined that Brown had violated the company’s code of conduct—which instructed employees to avoid conflicts of interest and self-dealing transactions and prohibited the use of confidential information “except for the proper conduct of the business of” National Penn—and terminated her employment in late 2008. At the time she was terminated, Brown was two weeks past due to receive her annual performance review and salary increase.

Brown sued National Penn in the U.S. District Court for the Eastern District of Pennsylvania, alleging gender discrimination and retaliation under both Title VII of the Civil Rights Act of 1964.

Courtroom judge


No proof of discrimination

The district court held that Brown failed to state a prima facie claim of discrimination. To demonstrate gender discrimination, Brown needed to show that:

(1) She belonged to a protected class;

(2) She was performing adequately;

(3) She suffered an adverse employment action; and

(4) The action took place under circumstances suggesting discrimination.

Although Brown’s termination and perhaps the delay in her performance evaluation and expected raise constituted adverse employment actions, the trial court ruled for the employer because she failed to provide any evidence indicating that National Penn took those actions under circumstances suggesting discrimination.

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Brown’s discrimination argument was unpersuasive because the record showed that she was fired for taking advantage of her position by obtaining and using confidential customer information for her own benefit, an action that violated National Penn’s code of conduct. Brown offered no examples of male coworkers being treated differently and drew no logical connection between her firing and Broemal’s alleged comment about larger clients preferring male agents. Brown pointed to no record evidence indicating that her termination was because of her gender.

The district court also held that Brown failed to provide any evidence of retaliation. To prove her case, Brown was required to show that:

(1) she was engaged in protected activity

(2) she was discharged subsequent to or contemporaneously with such activity

(3) there was a causal link between the protected activity and the discharge.

The district court held that Brown failed to show that she engaged in a protected activity because she complained only of unfairness.

Code of Conduct notebook


Distorting the record

Brown appealed and the U.S. Court of Appeals for the Third Circuit reviewed her claims in Brown v. National Penn Ins. Services Group Inc. On appeal, the court said, Brown attempted to distort the record, arguing that within three weeks of Brown’s complaint during her conversation with Broemal about unfairness about National Penn’s gender-based decision-making, Brown was terminated. But she provided no citation to the record in support of this characterization, and the court’s independent review of the record led it to conclude that she did not complain about gender-based decision-making during her meeting with Broemal. Instead, Brown herself stated that she complained only that the reorganization, including her move to a shared office, “was unfair.” Such a generic complaint does not qualify as protected activity, so Brown’s case failed.

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Insurance agents and brokers, like Brown, must keep the records and information about the clients sacrosanct. Brown, without authority, did the opposite. By violating the insurer’s code of conduct, which instructed employees to avoid conflicts of interest and self-dealing transactions and prohibited the use of confidential information “except for the proper conduct of the business of” National Penn, she was terminated. The court was convinced that she was terminated solely because of her breach of the code of conduct.

Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance coverage, claims handling, bad faith and fraud. Contact him at