EEOC Says Allstate Committed Age Discrimination

August 27, 2003 ( - The Equal Employment Opportunity Commission (EEOC) has determined that Allstate Insurance Company violated the Age Discrimination in Employment Act (ADEA) as part of its 2000 "Preparing for the Future" Group Reorganization plan.

Through this plan, the company committed systematic discrimination of people over the age of 40, with Allstate failing to show that there was any legitimate business purpose for the policy, the EEOC concluded.The determination came after the EEOC conducted an investigation and found94% of the terminated employee agents were over age 40 and 84% of the individuals hired to fill newly-created customer service positions were under age 40, according to the Web site .

Additionally, the federal agency said its investigation established that Allstate adopted the policy to avoid rehiring the 6,200 employee agents purportedly terminated “under circumstances where they could retain their original service date from their earlier period of employment.” By denying these terminated employees a job, Allstate intended to deprive them of their ability to continue to accrue pension and other benefits to which they had been entitled as employees without a “break in service,” according to the Web site.

The EEOC has encouraged Allstate to enter into conciliation talks as a means of resolving the company’s unlawful conduct. If such talks are unsuccessful, the EEOC has the right pursue further legal action against Allstate. Efforts toward settling other aspects of the case have so far failed.

Good Handed Suits

This is just the latest in a serious of age-discrimination allegations the company has faced. In 2001, the good hands were slapped with a lawsuit by both its agents and separately by the EEOC (See AARP Lends a Hand in Employee Suit Against AllState ).

The dispute began when Allstate gave the agents until the end of June 2000 to accept an offer to become independent contractors or leave.To continue employment at Allstate as contractors, agents were required to sign a waiver saying that they would not sue Allstate. All but 6,400 complied and the remainder – 90% if whom where older than 40 – were dismissed and given the option of re-joining the group as contractors.

The EEOC found the waiver was a form of pre-emptive retaliation, amounting to “unlawful interference, coercion and intimidation,” and that Allstate had violated several laws against discrimination. The agency then filed its initial lawsuit in late 2001 (See EEOC Takes on Allstate ).