Judge to decide if whistleblower can proceed with Globe Life lawsuit

A Michigan judge will decide whether an ex-Globe Life executive turned whistleblower can proceed with his lawsuit for wrongful termination.

Scott Dehning claims that Globe Life and subsidiary American Income Life Insurance Co. fired him in May 2023 after he reported "a clear practice of unethical and potentially illegal business practices" to Michigan regulators.

Defendants filed for summary judgment last month, stating that Dehning was fired for cause. Dehning responded last week, claiming that David Zophin, the president of American Income, manufactured several schemes to fire him throughout 2022.

"My immediate supervisor ... told me on several occasions that Zophin wanted to have me fired because of my actions in reporting AIL to [Michigan regulators]," Dehning wrote. "He specifically told me that Zophin was out to get me and that I better watch out."

Dehning was vice president of field operations from September 2015 until he was fired. In that role, he supervised about 17 state general agents, the lawsuit said.

In the original eight-page complaint filed in August, Dehning said he viewed certain sales practices with growing uneasiness. He eventually investigated and confirmed the "unethical and potentially illegal sales practices," sharing his findings with the Globe Life executive team, the lawsuit states.

Multiple short-seller reports surfaced earlier this year accusing Globe Life of rampant fraud tactics, including writing policies for dead and fictitious people, and an alleged kickback scheme that netted millions for senior executives.

Globe Life has denied all claims in a response to Dehning's lawsuit. However, in response to multiple lawsuits and other allegations, Globe Life's audit committee brought on international law firm WilmerHale to conduct an investigation.

Fired for cause?

Globe Life and AIL suggest that Dehning was fired after a sexual harassment claim lodged by his girlfriend at the time, court documents say. The woman had contacted AIL about a potential job and Dehning endorsed her for employment.

At the time, the woman was working as an independent contractor selling AIL life insurance policies for two different agencies. AIL interviewed the woman in October 2022, about the same time that Dehning said he broke up with her and withdrew his endorsement of her potential employment.

In early 2023, Dehning said he heard that his former girlfriend claimed sexual harassment.

"I was told that she claimed that I promised her a job with AIL in exchange for sex," Dehning wrote in an affidavit. "I did not take the claim seriously because I knew that this was my girlfriend, who I had dumped when I found out some significant personal information about her that reflected poorly on her."

In its motion, American Income attorneys state only that "AIL terminated Plaintiff for a legitimate reason that is unrelated to his alleged protected activity."

Protracted investigation

In his lawsuit, Dehning claims that the American Income Life executive team – CEO Stephen Greer, Zophin and General Counsel Joel Scarboro – did not take action on his concerns. At some point in 2021, Dehning decided to contact Michigan authorities, the lawsuit states.

During a later meeting with the executive team, Dehning said he was told that the Michigan Department of Insurance had opened an investigation into the company. At the end of that meeting, the lawsuit states, Scarboro told Dehning to "stop talking to your friends," a reference to Michigan insurance regulators.

In the ensuing weeks and months, the executive team would ignore Dehning during meetings and other work settings, the lawsuit states. On May 19, 2023, he was "abruptly terminated without warning," the lawsuit states. The only reason given for Dehning's termination was that he was "a risk to the company," according to the lawsuit.

Prior to his dismissal, Dehning claimed that Zophin threatened to fire him several different times during 2022. At least twice, Zophin enlisted other AIL executives in alleged attempts to fire Dehning, his statement claims.

Dehning finally confronted Zophin. "I specifically told him that I would sue if he continued to pursue bogus reasons for terminating me," the affadvit reads.

© Entire contents copyright 2024 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.