First American Financial became the last of the big four title insurance underwriters to settle allegations over employment practices with the New York Attorney General's office.
The office has conducted a multi-year investigation into agreements among both underwriters and agencies not to solicit each other's employees. Most underwriters also have direct relationships with clients that drive policy acquisition. As a result, they compete in the labor market, the Attorney General said.
The $4.5 million fine represents the largest penalty agreed to by industry members that were alleged to participate in these no-poaching activities. Total fines for the six settlements — which includes a joint agreement with underwriter Amtrust and its agency First Nationwide and a separate pact with Kensington Vanguard National Land Services — ended up at $13.75 million.
"We're pleased to have put this matter behind us and look forward to continuing to support the secure and efficient transfer of real estate in New York. First American has been and remains committed to integrity and compliance in its business practices," a statement from the company said.
The company neither admitted to or denied the Attorney General's findings, the settlement agreement added.
"First American had secret agreements with competitors that harmed workers' career opportunities and unfairly kept wages low," Attorney General Letitia James said in a press release. "New York workers should be empowered to grow within their chosen careers, not held back by illegal agreements meant to reduce opportunities for employees."
The agreement also mandates that First American cooperate with the Attorney General in its ongoing investigation.
Similar to a clause included in the agreement with Fidelity National Financial, First American agreed to pay an additional $1-million-per-incident penalty if it "knowingly withheld documents" related to no-poach contracts, even if it was not a participant in that agreement.
First American is the nation's second largest title insurance underwriter at the holding company level. Its primary operating unit, First American Title Insurance had the most volume among underwriters in the second quarter at a 22.3% market share, according to American Land Title Association data.
Fidelity National, the largest holding company in terms of premiums written, paid a $3.5 million fine in March. Stewart Information Services settled for $2.5 million, while the first underwriter to enter into an agreement with James in September 2021, Old Republic International, had the smallest fine among the major underwriters, at just $1 million. The Amtrust/First Nationwide settlement was for $1.25 million, while Kensington's agreement, entered into in July, was for $1 million.
