A federal judge in Manhattan has declined to dismiss a lawsuit filed against Chattanooga-based UnumProvident last November.
Judge Denise Cote on Tuesday issued a 7-page memorandum that keeps alive the claim by a group of workers who allege the firm had a scheme to deny disability benefits. UnumProvident has denied the charge.
The judge also declined to remove from the case J. Harold Chandler, who was recently ousted as UnumProvident CEO.
The suit seeks class-action status.
It said UnumProvident at one time gave bonuses and promotions to workers who were aggressive in denying claims.
Judge Cote wrote that “these plaintiffs have standing to press these claims.”
The judge said the workers “are not seeking benefits. They are seeking reforms to (UnumProvident’s) disability claim process.”
The action is brought on claims dating back to 1999 when Unum and Provident merged.
Attorney Richard J. Quadrino said the case “seeks to reform the manner in which the company conducts its business, so that claims will be decided on the merit, rather than in accordance with a monthly financial target,” Quadrino said.
Regarding defendant Chandler, the judge said a corporate office is liable “for any breaches of fiduciary duty which he personally commits.”