EEOC Takes on Allstate

December 28, 2001 ( - After more than a year of fruitless settlement talks, the Equal Employment Opportunity Commission (EEOC) filed a discrimination suit against the Allstate Insurance Company.

The suit, filed in the US District Court in Philadelphia, accuses the insurer of discriminating against its agents, following its decision to change the job status of 15,200 regular employees that make up its sales force to independent contractors – without retirement and healthcare benefits.

Allstate’s decision came following increasing pressure from competitors like Geico, which uses no agents, and Progressive, which relies on phone and Internet sales.


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. The remainder, 90% if whom where older than 40, were dismissed and given the option of re-joining the group as contractors.

The EEOC determined that 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.


Frustrated over the months of wrangling over a settlement, Allstate agents filed their own lawsuit – seeking class action status, charging the insurer with age discrimination and illegal denial of employee benefits. Allstate moved to dismiss the suit.

Government officials and lawyers for the agents said they plan to ask the federal court in Philadelphia to combine the two suits. As a result, private and government lawyers would work together against Allstate.

Read more at AARP Lends a Hand in Employee Suit Against Allstate