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A victory for former Prudential Insurance employees

Wednesday, May 24, 2006

There is a victory for former employees of Prudential Insurance. They have for years claimed that the law firm they hired to represent them against Prudential, instead sold them out. Now, documents are about to be unsealed and they will get their day in court.

You have to wonder what are they trying to hide? For three and a half years, this case has been shrouded in secrecy -- sealed at the request of both Prudential and a law firm that was supposed to be their adversary. Instead, they became legal allies trying to keep their dealings in the dark. Well, that's about to change.

These former Prudential Insurance agents and mangers claim they were punished for one reason.

Schubert Jacques, former Prudential employee: "Prudential did not want us to write to minorities. They did not want the minority business."

Here's some background: By 1999, Prudential Insurance, headquartered in Newark, New Jersey, had been accused of various types of discrimination by a staggering 359 current and former employees. They signed to be represented by the New York based law firm, Leeds, Morelli and Brown. Prudential, determined to keep the claims out of court and the media, agreed to a confidential mediation process to settle them.

What these men and others say they didn't know is that Prudential and LMB entered into a separate secret agreement, which we obtained. The law firm got $5,000,000 from Prudential up front. The companies deny that was improper.

Larry Lederman, former Prudential employee: "The secret agreement meant, as far as I am concerned, that there was a conflict of interest."

They filed a lawsuit alleging fraud and deceit, enlisting these New Jersey lawyers who specialize in legal malpractice cases.

Angela Roper, attorney for employees: "It is a perverse, corrupt, outrageous, unbelievable story of a corporation and law firm engaging in acts that no one could possibly believe takes place."

In an effort to keep the details of their dealings secret, Prudential and LMB went to court, and succeeded in getting a New Jersey judge to seal everything related to the case. When media outlets such as ABC wanted to know the reasoning, the judge sealed his decision about the decision.

Ken Thyne, attorney for employees: "The goal was to keep a lid on this so people wouldn't hear about it ... and keep people from finding out that this type of corruption was going on."

On Wednesday, an appellate panel issued a decision to unseal the case. The decision notes that "the allegations might embarass the defendants" but that doesn't justify secrecy in a matter of "heightened public interest: allegations of racial discrimination against prudential and fraud and bribery claims against both Prudential and LMB."

Angela Roper: "I don't blame them for not wanting the story to come out. But you know what? They shouldn't have done it to begin with and the public has a right to know, and our clients have the right to have their day in court, which they're now going to get."

Artie Talbott, former Prudential employee: "If you stall the little guy long enough, you choke them."

Seven years later, Talbott, for one, has still has never gotten a cent.

"If we make this last forever, we'll crush them, and that looks like that's what they wanted to do," he said.

Larry Lederman: "In my wildest dreams, I could not imagine that the law firm that I engaged to defend me is now behind closed doors making a secret agreement that is against me, not for me. So I think we can stop this from going on in corporate America."

Leeds, Morelli and Brown echoed that, stating: "The firm is confident that when all of the facts of the case are adjudicated, the firm will be vindicated."

The fraud case will be heard in a court of law. The appellate division reversed the ruling of the lower court judge who had sent it to arbitration. [Notes:This has been printed.]

(Copyright ©2014 WABC-TV/DT. All Rights Reserved.)

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