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On April 29, 1985, the District Court ruled in the liability
phase that State Farm was liable under Title VII for classwide
discrimination on the basis of sex. Specifically, it ruled that
women who attempted to become trainee agents were "lied to,
misinformed, and discouraged in their efforts to obtain the entry
level sales position." The court found State Farm liable with
respect to "all female applicants and deterred applicants who, at
any time since July 5, 1974, have been, are, or will be denied
recruitment, selection and/or hire as trainee agents by defendant
companies within the State of California."
On May 1, 1987, Donna Fredrickson (petitioner) applied to
become a State Farm trainee agent. State Farm rejected her
application and appointed a male applicant. Petitioner
subsequently joined the class action suit against State Farm.
The parties to the class action subsequently reached an agreement
in a consent decree as to the remedy phase of the litigation.
The consent decree provided for individual hearings to determine
each claimant's entitlement to damages and the amount of such
damages.
Petitioner ultimately prevailed in her claim against State
Farm. In February of 1992, petitioner and State Farm entered
into a settlement agreement entitled "Settlement Agreement and
General Release". That agreement provided in relevant part:
The approximate full value of [petitioner's] claim
under the Consent Decree damage formula as of February
1, 1992, is $173,057.00, which represents back pay as a
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