>A Manhattan federal judge refused to dismiss the lawsuit by workers who claim UnumProvident committed ERISA violations by giving bonuses and promotions to its employees based upon the numbers of claims they denied. This scheme, the plaintiffs contend, allows UnumProvident to save money and increases profits, according to a Dow Jones report.
>US District Judge Denise Cote said in her written opinion that the plaintiffs have standing to pursue their claims. Further, the judge noted that the workers “are not seeking benefits. They are seeking reforms to (UnumProvident’s) disability claim process.”
>The suit was filed on behalf of employees whose long-term disability claims have been handled by UnumProvident since June 1999, when Unum Corp and Provident Cos. merged. Richard Quadrino, an attorney representing the plaintiffs, said the case could encompass tens of thousands of workers and seek damages in the “many millions of dollars.”
The suit is the first to be brought as a class action accusing UnumProvident of violating ERISA. UnumProvident has already been accused of wrongfully terminating benefits in cases that have resulted in jury verdicts of millions of dollars. A $31.7-million verdict was handed down in January 2003 in one case involving an eye surgeon who was kept away from the operating table due to anxiety tremors (See Jury Slaps Insurer with $30 Million in Punitive Damages ).
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