Allstate Agent Case-

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Allstate Agent Case-

Unread postby RatPak11 » Tue May 27, 2008 4:00 pm

http://209.85.141.104/search?q=cache:ix ... d=11&gl=us

IMPORTANT NEW DEVELOPMENTS


June 2, 2008

Today, the Romero plaintiffs and EEOC each filed briefs in connection with the appeals taken from Judge Fullam’s decision of June 20, 2007, which granted summary judgment in favor of Allstate. Copies of the briefs can be downloaded by clicking here and here. Allstate will file its opposition within 30 days.


May 6, 2008

On June 20, 2007, the United States District Court for the Eastern District of Pennsylvania issued an order reversing its earlier ruling of March 30, 2004, in which it had concluded the Release and Waiver Agreement that Allstate required employee agents to sign as part of the "Preparing for the Future" Group Reorganization Program was retaliatory and in violation of applicable federal law and could be voided at the option of each employee agent who signed the Release. In addition to vacating its ruling concerning the validity of the Release, the District Court adopted the "tentative conclusions" set forth in its order dated March 21, 2007 (which is discussed below) and, as a result, granted summary judgment in favor of Allstate as to the discrimination and retaliation claims asserted by the plaintiff employee agents under the Age Discrimination in Employment Act and Employee Retirement Income Security Act. Finally, the District Court indicated its intention to close the case files.

Plaintiffs, together with the United States Equal Employment Opportunity Commission, have taken an appeal from the District Court's ruling and, in accordance with the scheduling order issued by the United States Court of Appeals for the Third Circuit will be filing briefs with the Court of Appeals by June 2, 2008. Allstate will have to file responsive briefs within 30 days. Copies of the parties' briefs will be posted after they are filed.


May 24, 2007

Plaintiffs have filed a Notice of Supplemental Authority to bring to Judge Fullam's attention a controlling decision issued by the United States Court of Appeals for the Third Circuit on May 14, 2007. Plaintiffs believe that this decision, known as Jakimas v. Hoffman-La Roche, Inc., demonstrates not only that the Court was wrong in imposing a "tender back" requirement with respect to the Release in its ruling of March 30, 2004, but also that the Court should not rule as a matter of law that execution of the Release was knowing and voluntary, that the Release was not part and parcel of an illegal scheme, or that the Release was not unconscionable and in violation of public policy. Plaintiffs argue further that Jakimas instructs that the Court should not dismiss the claims arising under Section 510 of ERISA without first affording plaintiffs the opportunity to conduct merits discovery. Because Judge Fullam limited additional briefing relating to the tentative conclusions issued on March 21, 2007, to 10 pages, plaintiffs have filed a motion asking the Court to accept for filing a supplemental memorandum that discusses the import of the Jakimas decision in greater detail.

April 2 , 2007


The proposed class action lawsuit brought by 29 plaintiffs, known as Romero I, seeks to recover pension, medical and other benefits estimated in the hundreds of millions of dollars, as well as compensatory and punitive damages and other relief, on behalf of about 6,200 current and former Allstate agents. The plaintiffs have alleged that the company betrayed its long-time "captive" employee agents by wrongfully terminating their employment contracts in order to deny them pension and other employee benefits and to rid itself of thousands of older employees. The suit claims that Allstate's actions taken as part of the "Preparing for the Future" Group Reorganization Program violated the Employee Retirement Income Security Act ("ERISA"), the Age Discrimination in Employment Act ("ADEA"), and Allstate's contractual and fiduciary duties. The plaintiffs also allege that Allstate wrongfully refused to rehire any of the terminated employee agents for a period of one year to reduce retirement benefits that former agents could earn in the future.

The U.S. Equal Employment Opportunity Commission has filed two lawsuits against Allstate on behalf of affected agents. The first, filed in December 2001, alleges that Allstate violated the anti-retaliation provisions of the ADEA, Title VII of the Civil Rights Act and the Americans with Disabilities Act by forcing its employee agents to sign a release and waiver that the EEOC previously determined to be unlawful. The EEOC's lawsuit has been consolidated with Romero I. The second lawsuit, filed in October 2004, alleges that the one-year "rehiring moratorium" adopted by Allstate constituted a pattern and practice of unlawful age discrimination. According to the EEOC, the refusal to rehire employee agents had the intended effect of depriving individuals of the ability to continue to accrue the substantial pension and other benefits to which they had been entitled without a "break in service."

On March 30, 2004, Senior District Judge John Fullam granted partial summary judgment in favor of plaintiffs in Romero I, holding that the release violated the ADEA because it barred the filing of "charges," including challenges to the validity of the release. As Judge Fullam observed, "we have no way of knowing how many other employee-agents failed to pursue charges before the EEOC simply because they accepted the release language at face value." The Court held further that Allstate had engaged in unlawful retaliation under the ADEA, Title VII and other laws in order to prevent agents from exercising their federally-protected rights. As part of its ruling, however, the Court concluded, based on the limited record before it, that there was "no basis" for plaintiffs' age discrimination claims. Although the Court did not actually dismiss the ADEA claims, it held that agents who desire to have the release invalidated and pursue claims for damages or other relief would first have to repay or "tender back" to Allstate "any and all benefits received by the signer in exchange for the release."

Plaintiffs filed a motion in April 2004 asking the Court to reconsider the "tender back" requirement. The EEOC also filed its own motion asking that the Court clarify its ruling.

In December 2005, Allstate filed a summary judgment motion asking the Court not only to reconsider its March 2004 decision and reverse itself by upholding the release. Allstate also is asking the Court to dismiss the claims the Romero plaintiffs are prosecuting under the ADEA and ERISA, including the claim that the release constitutes unlawful retaliation. CEO Liddy has joined in the request for summary judgment. Plaintiffs and the EEOC have opposed the motion on numerous grounds. In a 48-page brief filed with the Court under seal, plaintiffs lay out the reasons that Allstate is not entitled to seek reconsideration of the March 2004 ruling at this late date and, in any event, is not entitled to dismissal of the ADEA and ERISA claims or, indeed, any of their claims as a matter of law. In further support of their arguments, plaintiffs note, among other things, that they have not been able to undertake "merits" discovery because of Allstate's unjustified refusal to produce documents responsive to their discovery requests. Plaintiffs therefore have requested that the Court deny the motions for summary judgment and that it instead grant the relief requested with respect to the "tender back" requirement in the motions that have been pending since April 2004.

Judge Fullam has denied plaintiffs' motion for reconsideration and, in a ruling dated March 21, 2007, advised the parties that he has reached a number of tentative conclusions in this case, the EEOC case and Romero II. As set forth in the memorandum opinion issued by the Court, Judge Fullam stated that he had concluded that his March 2004 ruling was "in error" insofar as he found that the Release was voidable and, in light of other tentative conclusions set forth in his ruling, that "the validity of the release has become moot." With respect to the other tentative conclusions, Judge Fullam stated that a 2005 decision issued by a United States Court of Appeals in Isbell v. Allstate Ins. Co. "warrants the conclusion that plaintiffs' claims of ERISA violations, age discrimination and retaliation must fail." It therefore appears that it is Judge Fullam's intention to uphold the Release and, in addition, dismiss the federal law claims brought under the ADEA and ERISA. Judge Fullam nevertheless has invited the parties to submit additional briefs that bring to the Court's attention any issues that he may have overlooked, as well as any argument or "other factor" that impugns the decision in Isbell. Plaintiffs believe that the tentative conclusions reached by Judge Fullam are not correct and will file a brief that attempts to explain why he is in error. We will keep you advised of any further rulings from the Court.


Anyone seeking additional information about the case, including whether they are included in the class that plaintiffs seek to have certified, or any of the proposed subclasses, are encouraged to contact Morgan, Lewis & Bockius LLP or Sprenger & Lang PLLC.
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Re: Allstate Agent Case

Unread postby RatPak11 » Mon Mar 23, 2009 7:31 pm

http://www.forbes.com/feeds/ap/2009/03/ ... 02445.html


Associated Press
Allstate agents in court over contractor status
By MARYCLAIRE DALE , 03.23.09, 07:19 PM EDT

A group of insurance agents asked a federal appeals court on Monday to revive an age discrimination lawsuit over the Allstate Insurance Co.'s decision to switch thousands of them from employees to independent contractors.

In oral arguments, a three-judge panel questioned a lower court's brief order that dismissed what the panel called a complex and important case.

The former Allstate (nyse: ALL - news - people ) agents argue that the insurance company, which is based in Northbrook, Ill., illegally switched 6,400 of them from employees to independent contractors in 2000, violating federal pension security, age discrimination and other laws.

Some of the agents were days away from the 20-year service mark needed for early retirement when the conversion took place, said lawyer Peter Buscemi, who represented the plaintiffs.

Allstate's lawyer, Richard Godfrey, said that was bound to be the case given the thousands of agents involved. He said the conversion was a legal plan designed to save money.

Allstate's president at the time was Edward Liddy, who as chairman of the insurance giant American International Group Inc. (nyse: AIG - news - people ) is now at the center of the storm over bonuses paid by companies receiving government bailouts.
The Equal Employment Opportunity Commission has joined the case, accusing Allstate of retaliating against 19 agents who refused to sign releases required to continue as contractors. The releases prohibited the agents from suing for any past discrimination.

The 3rd U.S. Circuit Court of Appeals heard argument Monday on both issues.

Godfrey noted that Allstate paid out $182 million in cash severance packages, averaging $282,000, and let agents who stayed on keep their client rosters, worth up to $3 million each.

He argued that few agents refused to sign the waiver because the offer was such a good deal. But the agents said they had little choice if they wanted to continue making a living with the company, which says it has $156 billion in assets and sells 13 major lines of insurance, including auto, property, life and commercial.

U.S. District Judge John P. Fullam had dismissed the agents' suit, which sought class certification. The appeals court panel did not indicate when it would rule.
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Re: Allstate Agent Case

Unread postby RatPak11 » Thu Mar 26, 2009 10:06 am

http://www.smartbrief.com/news/pli/stor ... 08BBE0ADAF

EEOC joins former Allstate agents in federal discrimination suit
PLI SmartBrief | 03/25/2009

The 3rd U.S. Circuit Court of Appeals reviewed a case in which 6,400 former insurance agents accuse a carrier of switching them from employees to independent contractors, violating several employment and age-discrimination laws. The Equal Employment Opportunity Commission said the insurer retaliated against 19 agents who refused to sign releases that required them to continue working as contractors and barred them from suing on the grounds of discrimination. The insurance company contends that the measures were a legal means of cutting its costs. Legal Intelligencer (Philadelphia), The (free registration) (03/24)
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Re: Allstate Agent Case

Unread postby RatPak11 » Mon Aug 03, 2009 1:44 pm

http://www.dailyherald.com/story/?id=310269

Allstate may face revived suit over agent benefits :D
Bloomberg NewsPublished: 7/29/2009 4:39 PM

Allstate Corp., the largest publicly traded U.S. home and auto insurer, may have to face a $2 billion lawsuit filed by current and former agents over benefits after an appeals court ruled the case was hastily dismissed.

The U.S. Equal Employment Opportunity Commission sued Allstate after it refused to compensate agents who were forced to become independent contractors as part of a reorganization. The insurer owed as much as $2 billion to 6,500 current and former agents affected by the plan, the EEOC said. The U.S. Court of Appeals in Philadelphia sent the case back to the trial court, saying the judge failed to give it full consideration.

"After many years of litigation, the district court granted Allstate's dispositive motions in a two-page order," the appeals court said in a ruling made public today. "The order was conclusory in tone and content and simply fails to do justice to the myriad issues before the court."

Allstate's plan to convert employee agents to contractors was part of a reorganization begun in 1999 by former Chief Executive Officer Edward Liddy, now head of American International Group Inc. The EEOC argued that Allstate violated employment laws by requiring its agents to sign waivers barring them from suing the company over the change.

Allstate fell 19 cents to $26.12 in New York Stock Exchange composite trading at 2:43 p.m. The shares have declined 20 percent this year.
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Re: Allstate Agent Case

Unread postby RatPak11 » Sun Sep 13, 2009 1:19 pm

http://www.forbes.com/feeds/ap/2009/09/ ... 77260.html

Associated Press
Allstate settles age bias case with EEOC
By BETSY TAYLOR , 09.11.09, 06:23 PM EDT


ST. LOUIS -- Allstate Insurance Co. will pay $4.5 million to about 90 employees to settle an age discrimination lawsuit stemming from the company's 1999 move to switch thousands of its agents from employees to independent contractors.

The settlement was announced Friday by the Equal Employment Opportunity Commission office in St. Louis. Allstate ( ALL - news - people ) said it believes it acted appropriately but settled to avoid a lengthy legal battle.

The EEOC said Northbrook, Ill.-based Allstate's 1999 reorganization hurt older workers looking to be rehired in another role by the company.

"They basically terminated the employment of 6,400 sales agents who had been employees, but everyone could have remained as independent contractors," said EEOC lawyer Felix Miller.

Many sales agents who were no longer employees sought other jobs with the company, such as positions in customer service or claims representatives, Miller said.

But Allstate adopted a policy not to rehire sales agents for one year after their employment ended, or longer if they were still receiving severance benefits. The company had stopped hiring new employee sales agents in 1990 as it moved toward using outside contractors, so the group of workers affected by the changes in 1999 and 2000 tended to be older, Miller said.

The EEOC said it brought the case because 90 percent of the agents subjected to the hiring moratorium were 40 or older. It was filed in Oct. 2004 under the Age Discrimination in Employment Act.

Allstate spokesman Mike Siemienas said Friday, "While confident that Allstate acted appropriately, we agreed to settle the long-standing dispute to avoid the burden and considerable continued expense of litigation for everyone involved."

He said related points of law remain disputed, and the company believes it would have legally prevailed if the matter had continued in the courts.

The settlement must be approved by U.S. District Judge Richard Webber.

The awards to about 90 individual former agents are expected to range from about $9,000 to $114,000, based on actual losses each person suffered and the likelihood of success each case would have had for a legal judgment in its favor, Miller said. Funds go to former employees who sought employment, or would have sought it, in the absence of Allstate's policy.

The settlement provides for discrimination training and other efforts to educate Allstate managers to prevent any violations of the Age Discrimination in Employment Act, according to the EEOC.

The Allstate Corp., the parent company of Allstate Insurance, is one of the nation's largest insurance providers. It has 37,000 employees and 14,800 agents and financial specialists according to its Web site.
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Re: Allstate Agent Case-Allsnake LOSES-Agents WIN!

Unread postby RatPak11 » Sun Sep 13, 2009 1:21 pm

http://www.bizjournals.com/stlouis/stor ... ily68.html

Allstate to pay $4.5M in settlement
St. Louis Business Journal

Allstate Insurance Co. had agreed to pay $4.5 million to 90 older former employees to settle a class-action age discrimination lawsuit.

The St. Louis district office of the U.S. Equal Employment Opportunity Commission handled the litigation.

One of the class members, Sandy Guthrie, is from Belleville, Ill.

In its 2004 lawsuit, the EEOC alleged that Allstate adopted a one-year hiring moratorium as part of a company reorganization from employee agents to what the company considered independent contractors.

The EEOC alleged that the policy had a disproportionate impact on Allstate’s employees over the age of 40 because more than 90 percent of the agents subjected to the hiring moratorium were 40 or older.

Allstate denies that its hiring moratorium violated the Age Discrimination in Employment Act.

Northbrook, Ill.-based Allstate is the nation’s largest publicly held personal lines insurer with $130 billion in total assets.
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Re: Allstate Agent Case-Allsnake Blinks-Agents WIN!

Unread postby RatPak11 » Mon Sep 14, 2009 8:14 pm

http://www.infozine.com/news/stories/op ... sid/37464/

Allstate to Pay $4.5 Million to Settle Age Bias Suit
Monday, September 14, 2009 ::

EEOC Resolves Class Case Against Insurance Giant Over Rehiring Policy Which Adversely Impacted Older Workers During Companywide Reorganization

St Louis, MO - infoZine - The U.S. Equal Employment Opportunity Commission (EEOC) today announced a major settlement of an age discrimination class lawsuit against Allstate Insurance Company, one of the nation’s largest insurers, for $4,500,000 to be paid to approximately 90 older former employees, in addition to significant remedial relief.

In its lawsuit, filed in October 2004 under the Age Discrimination in Employment Act (ADEA), the EEOC charged that in the year 2000 Allstate adopted a hiring moratorium for a period of one year, or while severance benefits were being received, that applied to all its employee-sales agents who were part of its Preparing For The Future Reorganization Program. The program was part of Allstate’s reorganization from employee agents to what the company considered independent contractors. The EEOC alleged that the policy had a disproportionate impact on Allstate’s employees over the age of 40 because more than 90 percent of the agents subjected to the hiring moratorium were 40 years of age or older. Allstate denies that its hiring moratorium violated the ADEA.

“Discrimination against older workers is counterproductive and wrong, and the EEOC has been taking a close look at ways to increase our law enforcement efforts in this area,” said EEOC Acting Chairman Stuart J. Ishimaru. “Corporate America must be more vigilant in guarding against job bias affecting older workers, or risk action by the EEOC. This settlement shows there is a high price to pay for discriminatory employment policies and practices that adversely impact older workers.”

In 2005, the U.S. Supreme Court held in Smith v. City of Jackson that a facially neutral policy, such as Allstate’s hiring moratorium, which disproportionately affected those age 40 and over violated the ADEA unless the policy was based on a reasonable factor other than age.

As provided in the Stipulated Order resolving the litigation, pending approval by U.S. District Judge E. Richard Webber in U.S. District Court for the Eastern District of Missouri (Civil Action No. 4:04CV01359 ERW), Allstate will pay former employees who sought employment -- or would have sought employment with the company in the absence of its policy -- a total of $4.5 million to be divided among the class via a settlement fund. The order, in effect for three years, also provides for discrimination prevention training, posting of notices, reporting and monitoring, and other relief designed to educate Allstate managers in order to prevent future violations of the ADEA.

In 2007, the parties settled claims of disparate treatment which were asserted for two individuals. Those claims were settled for $250,000 and are not covered by this settlement.

EEOC Regional Attorney Barbara A. Seely of the agency’s St. Louis District Office, which handled the litigation, said, “This settlement should go far in educating Allstate’s managers about their responsibilities under the Age Discrimination in Employment Act. The training and other injunctive remedies provided will reinforce these prohibitions and help the company effectively prevent inadvertent violations of the ADEA going forward.”

In July, the Commission held a public hearing on age discrimination and barriers to the employment of older workers. Additional information about the hearing can be found on the EEOC’s web site at http://www.eeoc.gov/abouteeoc/meetings/ ... index.html.

According to its web site (http://www.allstate.com), the Northbrook, Ill.-based Allstate “is the nation’s largest publicly held personal lines insurer. A Fortune 100 company, with $130 billion in total assets, Allstate sells 13 major lines of insurance. Allstate was founded in 1931 and became a publicly traded company in 1993. The Allstate Corporation encompasses more than 70,000 professionals.”
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Re: Allstate Agent Case-Allsnake Blinks-Agents WIN!

Unread postby RatPak11 » Sun Sep 20, 2009 7:01 pm

http://www.businessweek.com/ap/financia ... LCRI80.htm

The Associated Press September 11, 2009, 6:23PM ET

Allstate settles age bias case with EEOC
By BETSY TAYLOR

ST. LOUIS

Allstate Insurance Co. will pay $4.5 million to about 90 employees to settle an age discrimination lawsuit stemming from the company's 1999 move to switch thousands of its agents from employees to independent contractors.

The settlement was announced Friday by the Equal Employment Opportunity Commission office in St. Louis. Allstate said it believes it acted appropriately but settled to avoid a lengthy legal battle.

The EEOC said Northbrook, Ill.-based Allstate's 1999 reorganization hurt older workers looking to be rehired in another role by the company.

"They basically terminated the employment of 6,400 sales agents who had been employees, but everyone could have remained as independent contractors," said EEOC lawyer Felix Miller.

Many sales agents who were no longer employees sought other jobs with the company, such as positions in customer service or claims representatives, Miller said.

But Allstate adopted a policy not to rehire sales agents for one year after their employment ended, or longer if they were still receiving severance benefits. The company had stopped hiring new employee sales agents in 1990 as it moved toward using outside contractors, so the group of workers affected by the changes in 1999 and 2000 tended to be older, Miller said.

The EEOC said it brought the case because 90 percent of the agents subjected to the hiring moratorium were 40 or older. It was filed in Oct. 2004 under the Age Discrimination in Employment Act.

Allstate spokesman Mike Siemienas said Friday, "While confident that Allstate acted appropriately, we agreed to settle the long-standing dispute to avoid the burden and considerable continued expense of litigation for everyone involved."

He said related points of law remain disputed, and the company believes it would have legally prevailed if the matter had continued in the courts.

The settlement must be approved by U.S. District Judge Richard Webber.

The awards to about 90 individual former agents are expected to range from about $9,000 to $114,000, based on actual losses each person suffered and the likelihood of success each case would have had for a legal judgment in its favor, Miller said. Funds go to former employees who sought employment, or would have sought it, in the absence of Allstate's policy.

The settlement provides for discrimination training and other efforts to educate Allstate managers to prevent any violations of the Age Discrimination in Employment Act, according to the EEOC.

The Allstate Corp., the parent company of Allstate Insurance, is one of the nation's largest insurance providers. It has 37,000 employees and 14,800 agents and financial specialists according to its Web site.
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Re: Allstate Agent Case-Allsnake Blinks-Agents WIN!

Unread postby RatPak11 » Wed Sep 23, 2009 7:45 am

http://ifawebnews.com/2009/09/22/allsta ... 5-million/

Allstate settles agents’ age discrimination suit for $4.5 million

By Bob Graham
Posted: September 22, 2009

The Allstate Insurance Co. has agreed to pay 90 former employees about $4.5 million to settle an age discrimination suit filed after the insurer tried to convert its workforce form employees to independent contractors in 1999.

The U.S. Equal Employment Opportunity Commission, in a case filed in Missouri, alleged that Allstate engaged in “unintentional discrimination by implementing a policy restricting for a period of up to two years the re-employment of its employees whose employment contracts were terminated” by the company. The conversion was part of its “Preparing for the Future Group Reorganization,” which was announced in November 1999.

The EEOC said the policy adversely affected employees who were at least 40 years old.

The insurer required about 6,500 agents to sign releases promising not to sue the company when it converted them to independent contractors, according to the EEOC suit, filed in October 2004 under the Age Discrimination in Employment Act.

A total of 19 agents refused to sign the release document, while another 4,000 became independent contractors and 2,500 left the company, according to published reports.

The EEOC filed the case because 90% of the agents on whom a hiring freeze was imposed were 40 or older.

In one of the largest discrimination suits ever filed, the EEOC had sought about $30,000 per affected agent, totaling about $2 billion, in compensatory and punitive damages.

The order, approved by U.S. District Court Judge E. Richard Webber Sept. 14, notes that Allstate neither admits nor denies the allegations.

As part of the settlement, Allstate officials must make sure that any policy used to reduce its workforce does not disqualify for re-employment a disproportionate number of employees age 40 and up. If the policy would unfairly affect older workers, the Northbrook, Ill.-based insurer must provide the EEOC with written notification of its plan and reasons for the action at least 14 days prior to implementation so the EEOC can meet to discuss the policy with Allstate officials, the order says.

Allstate also must require its human resources department to undergo training on the Americans with Disabilities Employment Act within six months.

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http://www.aarp.org/work/employee-right ... LIL-DOTORG

Romero v. Allstate, Three Cases
AARP Attorneys Represent Allstate Agents Alleging Age Discrimination
by: Tom Osborne, Sr. Attorney, Mary Ellen Signorille, Sr. Attorney, from:
AARP Foundation Litigation, February 6, 2012

AARP Foundation Litigation along with two Washington, D.C. law firms — Sprenger & Lang PLLC and Morgan, Lewis & Bockius LLP — are co-counsel for plaintiffs in three lawsuits challenging terminations at Allstate Insurance Company.

Background

The cases arise from Allstate's forced termination of more than 6,200 older employee-agents. Approximately 90 percent of those terminated were over age 40, and their median age was 50.

Allstate took several approaches in its job termination efforts. First, it tried to convert the employee-agents to independent contractors, which are far less costly to employers because some taxes and employee benefits do not have to be provided for independent contractors. Throughout the 1990s, Allstate attempted to persuade its employee-agents to convert to independent contractor status voluntarily — but got only a few takers.

Allstate next got more aggressive. In 2000, it notified all of its employee-agents that as part of a company reorganization their jobs had been eliminated and consequently they were only permitted to handle work for Allstate and/or receive severance benefits if they signed a release agreement stating that they were independent contractors. Denouncing the tactics used by Allstate as "threats, coercion and intimidation," the federal Equal Employment Opportunity Commission (EEOC), which has administrative authority over federal discrimination claims, issued a Determination that the release violated the Age Discrimination in Employment Act (ADEA) and was unenforceable. The agents sued Allstate, as did the EEOC.

The first suit (Romero I) was filed in 2001 as a class action on behalf of the 6,200 terminated employee-agents. In addition to claiming that the terminations of the older workers violated the ADEA, the suit also claims that Allstate violated the Employee Retirement Income Security Act (ERISA), since the terminations were allegedly intended to deprive the employee-agents of an excellent package of benefits, resulting in cost-savings to Allstate of nearly $200 million per year.

The second lawsuit (Romero II), also filed as a class action seeking to represent the 6,200 terminated employee-agents, claims that Allstate illegally reduced pension benefits in violation of ERISA's anti-cutback rules. Allstate's pension plan had initially provided early retirement benefits at age 55, which were enhanced as an early retirement incentive. In 1991, Allstate adopted pension plan amendments to phase out this incentive. Subsequently, Allstate adopted amendments to exclude certain types of service from being counted for determining eligibility for and earning additional amounts of early retirement benefits, sharply reducing the workers' ability to obtain these benefits. The district court's dismissal of this suit was reversed on appeal in 2011 by the U.S. Court of Appeals for the Third Circuit and is now pending in the lower court.

The third suit (Romero III), filed by the 29 named plaintiffs in Romero I, but not as a class action, alleges that Allstate illegally retaliated against them for filing the Romero I lawsuit by asserting groundless counterclaims against them in violation of the ADEA. Allstate's counterclaims are based on the fact that although these plaintiffs signed a release of their employment-related claims against Allstate, they subsequently filed discrimination charges with the U.S. Equal Employment Opportunity Commission (EEOC) and the Romero I lawsuit. The EEOC determined that the release signed by the Romero III plaintiffs is invalid because it violated the ADEA.

In the three cases the plaintiffs are seeking restoration of their lost benefits, the ability to obtain the enhanced benefits, monetary damages for back pay and other relief.

What's at Stake

Terminating employees because of advancing age or approaching dates for payout of retirement benefits violates several federal laws, including ERISA and ADEA — those are the challenges in Romero I. At issue in Romero II are Allstate's reductions in pension plan benefits for older workers. All proceedings in Romero III have been stayed pending the court's resolution of the validity, enforceability and applicability of the releases signed by plaintiffs.

Case Status

All three cases, which are captioned Romero v. Allstate Ins. Co., as well as the companion suit filed by the EEOC are before the federal district court in Philadelphia. After several years of inaction by the court on more than a dozen motions filed by the parties, the 3rd Circuit reassigned the cases to a new district court judge. In order to essentially restart this litigation, the court is to decide whether the release Allstate required the terminated employee-agents to sign is valid and enforceable against them. The court's decision on this issue, which will determine whether the cases can move forward, is expected in early 2013.
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Re: Allstate Agent Case-Allsnake Blinks-Agents WIN!

Unread postby RatPak11 » Wed Mar 19, 2014 1:47 pm

http://www.law360.com/employment/articl ... alls-short

EEOC Retaliation Case Over Allstate Release Falls Short
By Ben James

Law360, New York (March 14, 2014, 5:35 PM ET)
-- A Pennsylvania federal judge dismissed a long-running U.S. Equal Employment Opportunity Commission suit against Allstate Insurance Co. on Thursday, ruling that the release Allstate required workers to sign, which allegedly broke the law, didn't actually violate retaliation provisions in three federal anti-bias statutes.
Judge Ronald L. Buckwalter ruled on dueling summary judgment bids from the EEOC and Allstate, rejecting the agency's motion and agreeing with the company's argument that its release did not substantively violate any federal statute.

Thursday's ruling said that the court “certainly questions the validity of the release signed by Allstate’s former employee agents. The court does not, however, find that the release constitutes a substantive violation of the anti-retaliation provisions set forth in any of the federal discrimination statutes at issue.”

Though Judge Buckwalter's decision knocked out the EEOC retaliation case, filed back in 2001, the agency's suit was part of consolidated litigation against Allstate in which private plaintiffs still have claims in play.

The EEOC alleged that Allstate made roughly 6,200 employees sign a release waiving all workplace discrimination claims in order to stay onboard as independent contractor agents, and sought a declaratory judgment that the release was invalid.

The release-signing requirement amounted to unlawful retaliation under Title VII, the Age Discrimination in Employment Act and the Americans with Disabilities Act, the EEOC argued.

Though the case “didn't fit the mold of a typical retaliation claim,” the EEOC offered three theories to back up its contention that the release requirement violated the anti-retaliation statutes, Judge Buckwalter's decision noted.

The agency said that the requirement was a “facially retaliatory” policy, that workers who did not sign the release were deprived of continued employment for refusing to give up discrimination claims and that the agents who signed the release were victims of anticipatory retaliation.

The court went through each of those arguments and rejected them, but did say that the release “suffers from several infirmities that could potentially affect its validity.”

But the EEOC was looking to “fit a square peg into a round hole” by trying to turn those infirmities into a violation of anti-retaliation law.

"The anti-retaliation provisions were simply not meant to address this type of scenario. To hold otherwise would open the door for retaliation claims anytime an employer uses a release of claims, regardless of whether the use of that release is discriminatorily employed,” the ruling said.

The EEOC also argued that that a particular part of the ADA — section 503(b) — made the company's “sign the release or leave” stance unlawful, but the court said that provision was inapplicable to the case at hand.

An EEOC spokeswoman said on Friday that the agency was reviewing the decision to determine its options.

An Allstate spokesperson was not immediately available for comment on Friday.

Allstate is represented by Katherine Katchen, Donald Livingston and Nathan Oleson of Akin Gump Strauss Hauer & Feld LLP and Richard Godfrey, Sallie Smylie, Erica Zolner, Jordan Heinz and Tia Trout-Perez of Kirkland & Ellis LLP.

The case is EEOC v. Allstate Insurance Co., case number 2:01-cv-07042, in the U.S. District Court for the Eastern District of Pennsylvania.

--Editing by Stephen Berg.
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Re: Allstate Agent Case-

Unread postby RatPak11 » Sat Apr 26, 2014 6:34 pm

http://www.lexology.com/library/detail. ... 7b2427fc9b

Court rejects EEOC claim that employer's use of claim waivers was retaliation
Phelps Dunbar LLP
Craig S. Dawson
USA
March 18 2014

In a recent defeat for the EEOC, a federal district court for the Eastern District of Pennsylvania reaffirmed the use of severance agreements as part of a company’s reorganization, or reduction in force, to obtain releases of potential federal claims against the employer, while shedding light on the EEOC’s continued and increased focus on such releases.

In Romero v. Allstate Insurance Company, a case pending since 1999, Allstate announced that, as part of a new business model, it was reorganizing all of its employee agents into a single independent contractor program. As part of the program, Allstate terminated the employee contracts of more than 6,200 employee agents – approximately 90 percent of whom were over forty years of age – and offered those agents four severance options that included various benefits, including the right to continue to work as an independent contractor. Three of the four severance options were conditioned upon the agents’ agreement to execute a release, or waiver, of any potential claims they may have against Allstate under the Age Discrimination in Employment Act (“ADEA”) and other state and federal anti-discrimination laws.

The EEOC subsequently brought its own lawsuit against Allstate, alleging that the company unlawfully retaliated against the employee agents, in violation of the ADEA and other federal statutes. The EEOC offered three theories in support of its arguments, all of which the Court rejected in granting summary judgment for Allstate on March 13, 2014.

First, the EEOC argued that the release required as part of the severance options was facially retaliatory, because it was “reasonably likely to deter or disincentivize persons from engaging in future protected activity.” The Court disagreed, stating that the release of claims in connection with termination of employment is not, in and of itself, retaliatory. Indeed, in enacting the Older Workers Benefit Protection Act of 1990 (“OWBPA”), Congress expressly permitted such releases and defined the requirements necessary for them to be enforceable. Further, the severance options in question were conditioned on the employee’s execution of a release without regard to whether the employee may have had a potential ADEA claim, and the release did not categorize employees according to age or protected activity.

Second, the EEOC contended that, for those employees who refused to sign the release, Allstate’s refusal to allow them to remain employed was a causally-connected adverse employment action. In other words, the refusal to sign the release constituted a protected activity for which the employee suffered retaliation. The Court found that, “[w]hile creative, the EEOC’s argument again rests on faulty assumptions and misplaced legal theories.” For instance, one of the fundamental requirements for establishing a retaliation claim is demonstrating that the employer knew of the protected activity before taking the adverse employment action. The “mere refusal to sign a release,” however, did not clearly signal to Allstate that the employee intended to challenge some form of discrimination. Moreover, even if the refusal to sign the release could be considered a protected activity, the EEOC failed to show that Allstate’s withholding of severance benefits to which the employees were not otherwise entitled constituted an adverse employment action.

Third, the EEOC alleged anticipatory, or preemptive, retaliation as to those employees who signed the release, claiming that Allstate “clearly anticipated that agents would engage in protected activity and, as a result, forced agents to sign the Release and waive their rights” in order to continue working as independent contractors. While the court acknowledged the principle of anticipatory retaliation, it stated that the principle has only been applied where the employer “was made aware of or reasonably feared the employee’s specific intent to engage in protected activity and subsequently the employer engaged in the retaliatory activity.” Though Allstate may have feared that the large number of terminations would result in some litigation, nothing in the facts indicated that Allstate had “reasonably specific fears of federally-protected litigation,” such as discrimination lawsuits. Additionally, Allstate did not threaten some form of adverse employment action in the event the employees engaged in protected activity. To the contrary, the employee agents were terminated regardless of whether they signed the release.

Though the Court concluded that Allstate’s releases did not violate federal anti-retaliation statutes, this case demonstrates the EEOC’s continued focus on practices that allegedly restrict employees' access to the legal system. Indeed, as stated in the EEOC’s 2013-16 Strategic Enforcement Plan, the EEOC has identified as a national priority policies and practices it believes “discourage or prohibit individuals from exercising their rights under employment discrimination statutes,” and recently filed a much-publicized lawsuit against a national drugstore chain on a theory that its releases impermissibly restricted employees’ access to the EEOC. Additionally, though the Court did not find a substantive violation of the federal anti-retaliation statutes, the court’s ruling did not address issues concerning the releases’ validity, such as whether the releases were truly executed knowingly and voluntarily – issues the Court had previously decided would be left to a jury’s determination. Given the EEOC’s continued focus on this area, employers should assess their releases or waivers to ensure they reflect the current state of the law and are best positioned to withstand EEOC challenge.
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Re: Allstate Agent Case-

Unread postby RatPak11 » Thu May 01, 2014 12:30 pm

http://www.nytimes.com/2014/04/30/busin ... .html?_r=0

Allstate Case Shows Risk of Signing Away the Right to Sue
By TARA SIEGEL BERNARD
APRIL 29, 2014

When his children were young, Nathan Littlejohn was a regional salesman in search of a position that would allow him to spend more time with his family. So when he heard about Allstate’s neighborhood agent program in 1990, he was intrigued.

Over the next several years, he said, he worked round the clock to build his customer base and poured about $40,000 of his own money into his agency, located in Overland Park, Kan. He figured it was a long-term investment.

Using similar logic, Craig Crease was able to justify investing $120,000 in his Kansas City Allstate agency over the course of 14 years. The same went for Ron Harper in Thomson, Ga., who spent about $80,000.

But after building up their agencies for nearly a decade or more, the agents said they were called into meetings in late 1999 by Allstate managers. The agents could keep on selling Allstate policies, they were told, but they would no longer be entitled to health insurance, a retirement account or profit-sharing, and their pension benefits would no longer accrue. Instead, they would become independent contractors.

“They just pulled the rug out from beneath me,” said Mr. Littlejohn, now 65, who had two college-age children at the time. The company said the changes were the result of a “group reorganization.”

The men are among 6,200 agents who faced the same predicament: To continue to work with Allstate, the insurer required them to sign a release waiving their rights to sue. Most of them did sign, but a group of 31 agents sued Allstate anyway, for, among other claims, age discrimination and breach of contract.

Thirteen years later, the case is still winding through the courts. A judge ruled in February that a jury should decide whether the waiver the agents signed was valid, and it appeared, briefly, a trial date would be set for this spring. But last-minute complications have delayed the process again. More documents in the case — the plaintiffs are seeking class-action status — are expected to be filed in mid-May.

While the Allstate case is an extreme example, it illustrates the challenges employees face when they decide to sue an employer. Employee discrimination claims — which account for the majority of job-related lawsuits — are on the rise, but they remain notoriously hard to prove, legal experts said. (There were 21,396 age discrimination charges in 2013 filed with the federal Equal Employment Opportunity Commission, or nearly 23 percent of all charges filed, up from 16,548 in 2006.)

“These cases are hard to win,” said Stewart J. Schwab, dean and professor at Cornell Law School, who studied the success rates of employment discrimination cases from 1979 to 2006. He and his co-author found that of the small fraction of cases that go to trial, plaintiffs win about 28 percent of the time, on average, compared with nearly 45 percent in other types of civil cases.

The Allstate case demonstrates the risks inherent in signing documents — as the agents did — agreeing not to sue. The latest ruling in the case hangs on that very point.

Before the agents can bring the discrimination and other claims, a jury must decide that the employees were coerced into signing the waivers. Allstate, on the other hand, contends they signed knowingly — a point the company must prove to prevail.

In a statement, Allstate said it continually improved the way it did business to help customers and agents, and the plaintiffs were offered “significant benefits to participate in such a change, including the ability to sell their agencies, which they could not have done as employees.”

But the agents, 90 percent of whom were over age 40, said the consequences of not signing the release were costly: They would be prohibited from working as insurance agents within one mile of their agencies for one to two years, even though the agents leased or bought their offices in their own name. They would not be allowed to keep their business phone numbers. And the agents said Allstate warned them that they could never solicit their old customers, which they later learned was not true.

“Whatever options they offered left me worse off than I was before,” Mr. Crease said.

Ultimately, he said, he had no choice but to sign, sentiments echoed by both Mr. Littlejohn and Mr. Harper. They all continued as independent contractors, at least for several more years.

“They were put between a rock and a hard place,” said Tom Osborne, a senior lawyer with AARP’s litigation arm, who is co-counsel representing the plaintiffs. “If they didn’t sign, they couldn’t make a living as an independent agent.” Agents who did not sign and left Allstate were offered severance of up to 13 weeks’ pay compared with six months for those who did sign.

The judge presiding over the case acknowledged in a recent memo that an agent who did not sign the waivers was “substantially worse off” than an Allstate agent who was simply fired as part of a staff reduction. That employee would have been eligible for severance of up to 52 weeks, far more than the 13 weeks offered.

By calling the program a group reorganization, the company was able to avoid providing employees who did not sign the release severance of up to 52 weeks’ pay, Judge Ronald L. Buckwalter of the Federal District Court for the Eastern District of Pennsylvania said in an April 7 memo. Yet the judge said that Allstate’s cost-cutting program was just a staff reduction in disguise. He did not rule on whether Allstate’s actions were illegal, but did note that it was “self-serving and, from most perspectives, underhanded.”

Agents who signed the release and chose to work as contractors would generally get a $5,000 bonus and higher commissions, according to those with knowledge of the terms. Those who signed could also have chosen to sell their business or receive enhanced severance of up to 52 weeks of commission paid over two years.

The agents also said that Allstate made a series of misrepresentations. For instance, the agents said the company told them when they signed the release that it had no plans to cut commission rates. But the company’s documents show that it was planning to cut certain commissions, and it did reduce some of them in 2003, according to Judge Buckwalter, who ruled in February that the case should go to trial.

The agents also claimed that Allstate said they would have the opportunity to take other positions — such as in claims or underwriting — which would have allowed them to keep their benefits. But in 2000, while severance was being received, Allstate imposed a one-year hiring moratorium, which meant the agents could not be rehired. In 2009, Allstate paid 90 of the agents $4.5 million to settle an age discrimination suit, related to the moratorium, that was brought by the Equal Employment Opportunity Commission.

“But the biggest misrepresentation was telling them, ‘You may never — not for one year, or two or three — but you may never solicit your former customers, even if you go into vacuum sales,’ ” said Michael Lieder, a lawyer with Sprenger & Lang, and co-counsel representing the agents.

Mr. Harper sold his agency in 2002; he said he did not recoup his costs. After that, he bought and later sold a pizza parlor and worked as an insurance adjuster during hurricane season. He and his wife now run a paper-shredding business and an independent insurance agency in the same building that he bought to run his Allstate agency.

“The years that you make the most money for most jobs are the 10 years before retirement,” he said. “Instead, I find myself scraping by with my wife, working 50 hours a week for what would be entry-level salaries.”

Mr. Littlejohn and his wife are living in their daughter’s condo after losing their home in bankruptcy in 2011. He is working as an independent insurance agent after being fired by Allstate in 2009 as part of what he believes was Allstate’s plan to reduce the number of agencies. His wife, suffering from depression, had to retire.

“Everyone deserves a day in court,” Mr. Littlejohn said. “That is all we are asking.”
Last edited by RatPak11 on Sat May 03, 2014 8:37 pm, edited 1 time in total.
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Re: Allstate Agent Case-

Unread postby RatPak11 » Thu May 01, 2014 12:31 pm

http://www.abajournal.com/news/article/ ... te_agents/

Jurors to decide validity of right-to-sue waiver signed by Allstate agents who claim age bias
Posted May 1, 2014 5:55 AM CDT
By Debra Cassens Weiss

Thirteen years after filing their age bias case, 31 Allstate agents who signed a waiver giving up their right to sue are still waiting for a trial date.

Before their bias claims can be heard, jurors will decide whether the agents were coerced into signing the agreement, a judge ruled in February. According to the New York Times, “the case demonstrates the risks inherent in signing documents—as the agents did—agreeing not to sue.”

The agents were asked to sign the waiver as a condition to continue working for Allstate, albeit in a new capacity, the story says. The agents had been employees, but Allstate said the agents would become independent contractors, with no entitlement to health insurance, a retirement account or profit sharing.

If they refused to sign the release, Allstate would bar them from working as agents within one mile of their agencies for two years. The agents also allege they were told they couldn’t solicit their old customers, though that claim was not true. If they quit working for Allstate, those who didn’t sign would get only 13 weeks of severance, compared to six months for those who agreed to the waiver.

Ninety percent of the 6,200 agents affected by the change were over 40, the story says.

Allstate released a statement to the Times that says the agents were given “significant benefits to participate in such a change, including the ability to sell their agencies, which they could not have done as employees.” Higher commissions and a $5,000 signing bonus were also offered, the Times says, citing people with knowledge of the agreement. Some commissions were cut in 2003, however.

Comments:

B. McLeod
May 1, 2014 7:15 AM CDT
I can only imagine which side will be closing with, “That’s Allstate’s stand. What’s yours?”
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Re: Allstate Agent Case-

Unread postby RatPak11 » Mon May 05, 2014 12:03 pm

http://blog.aarp.org/2014/04/30/at-last ... s-forward/

At Last, Age Bias Case From 2001 Moves Forward
Posted on 04/30/2014
by Lisa McElroy

Suppose you believe that your employer has discriminated against you because of your age. After thinking it over, perhaps you decide to sue. You file your claim. And then you wait.

And wait. And wait.

People who seek redress through the justice system in this country often come up against a difficult reality: The courts are overloaded. Claims move slowly. Cases drag on for years.

Such is the case for a lawsuit brought by AARP Foundation Litigation against Allstate Insurance Co. on behalf of about 6,200 older employee-agents (more than 90 percent of them were over 40).

The case was originally filed in August 2001. Now, after nearly 13 years, it’s finally moving forward.

Here’s what happened.

In July 2000, Allstate terminated almost all of its employee-agents and advised that they could come back to work as independent contractors, drawing paychecks but not receiving any of their previous employee benefits — including health insurance and continued participation in the company’s retirement and pension plans. As part of the deal, they had to sign a release of all claims arising from their forced terminations.

A year later, with the help of AARP’s litigation arm, 31 plaintiffs filed a lawsuit against Allstate as a “representative action,” or one filed by a few people on behalf of many with the same legal problem. The case languished for several years until it was transferred three years ago to U.S. District Judge Ronald L. Buckwalter in Pennsylvania. After taking several months to review the voluminous facts in the case, Buckwalter decided that the key to deciding whether the case could proceed was whether the releases signed by the former employee-agents were binding.

In April 2013, both sides filed legal motions on the validity of the releases. The 31 plaintiffs argued that they were invalid and that their case should proceed; Allstate argued that the releases were valid and that the case should be dismissed.

On Feb. 27, in a 156-page opinion, Buckwalter denied both motions and ordered that the case proceed to trial so that a jury can decide the validity of the releases.

Three of the 31 named plaintiffs have died in the years since the case was filed, and several are in poor health.

“We’re pleased that Judge Buckwalter’s decision has at last cleared the way toward a trial — and, hopefully, justice for these older workers,” says Tom Osborne, a senior attorney with AARP Litigation Foundation.

With the 13-year legal logjam has been broken, a trial date will be set. Will justice move faster now?
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