Allstate Settles Age Bias Case for $4.5M

September 15, 2009 ( - Allstate Insurance Company has agreed to pay $4.5 million to about 90 older former employees as part of a settlement in an age discrimination lawsuit.

A news release from theU.S. Equal Employment Opportunity Commission (EEOC) said the money will be disbursed to former employees who tried to get an Allstate job or would have tried to get a job in the absence of a hiring moratorium implemented in 2000for a period of one year, or while severance benefits were being received. The moratorium applied to all its employee-sales agents who were part of its Preparing For The Future Reorganization Program – Allstate’s reorganization from employee agents to what the company considered independent contractors.

The EEOC alleged that the hiring policy had a disproportionate impact on Allstate’s employees over the age of 40 in violation of the Age Discrimination in Employment Act (ADEA) because more than 90% of the agents subjected to the hiring moratorium were 40 years of age or older.

U.S. District Judge E. Richard Webber in U.S. District Court for the Eastern District of Missouri approved the settlement pact, according to the EEOC.

“Corporate America must be more vigilant in guarding against job bias affecting older workers, or risk action by the EEOC,” said EEOC Acting Chairman Stuart J. Ishimaru, in the news release. “This settlement shows there is a high price to pay for discriminatory employment policies and practices that adversely impact older workers.”

Allstate also agreed in the settlement to institute a variety of new or strengthened corporate procedures to prevent further discrimination or deal with any similar future allegations.