Firm to Pay $500,000 in ‘Affair’ Firing : Ex-Insurance Man Wins Settlement From Mercury Group

An insurance executive who was fired after having an affair with a secretary has won a $500,000 out-of-court settlement from Mercury Insurance Group after he sued, claiming he was unjustly terminated.

William Conway of Escondido, a former Mercury branch manager, had suffered the “kiss of death” after his firing because insurance companies refused to hire him, said his attorney, Christopher B. Mears.

Twice Conway had applied for jobs and both times he placed first among other candidates after his termination Aug. 15, 1984. At the time, he managed Mercury’s San Diego claims branch. But other companies refused to hire him, Mears said, “once they learned the background of his termination.”

“This is a very close-knit industry and everybody knows everybody in it,” Mears said.

Feels ‘Vindicated’

Conway, 39, who is still unemployed, said he feels “vindicated” by the settlement, Mears said.

The former insurance executive was separated from his wife at the time of the affair and has since married a woman who does not work for Mercury.

Conway was employed seven years for the auto insurance company and was earning about $40,000-a-year when he was terminated.

He had sued in Orange County Superior Court seeking $10 million in punitive damages and $1 million in general damages. He also sued for loss of earnings. The settlement was reached Wednesday after two weeks of testimony in a jury trial before Judge Jerrold S. Oliver.

Conway claimed he was unjustly fired after he warned company officials about an alleged kickback scheme involving other officers. The firing, he claimed, was to frustrate any investigation.

No Written, Oral Policy

Mercury claimed Conway was fired for allegedly violating company policy, but witnesses, including top company officials, testified the company had no written or expressed oral policy.

Supervisors also claimed Conway was guilty of “poor judgment” for having a three-month relationship with a subordinate. But Mercury employees, including the secretary, told the court that other company executives also were having affairs yet had escaped any disciplinary action.

Jerry Benning, a property damage supervisor, acknowledged in court that he and two other officials were under suspicion at one time for allegedly accepting bribes from an auto body shop that received much of Mercury’s Orange County claims business. The results of an in-house investigation into that matter were not immediately known.

According to the settlement, Mercury’s president must also write a recommendation, and the company must correct Conway’s personnel file to “neutralize” any negative effect the termination may have caused.

Company officials could not be reached for comment.