"Good Hands" Firm Slapped with EEOC Letter

May 20, 2002 (PLANSPONSOR.com) - The Equal Employment Opportunity Commission has concluded that Allstate discriminated against about 650 life insurance agents - at the same time as it was negotiating a settlement on similar charges.

In a letter to both sides in the dispute dated May 10, Lynn Bruner, a district director of the Equal Employment Opportunity Commission, said Allstate had engaged in “unlawful interference, coercion and intimidation” against the life insurance agents in 2000 and 2001, according to the New York Times.

The complaint mirrors charges brought by the EEOC under comparable circumstances last December after more than a year of fruitless settlement talks with Allstate.  In that action, agents that did not agree to become contractors and did not sign a waiver agreeing not to sue Allstate – 90% of which were over 40 – were then fired. Allstate says the workers had a chance to receive more pay, more opportunity and to develop an equity interest in their own business

Mirror Action

In the more recent action, the EEOC also said Allstate effectively forced the agents to convert from being employees with health and pension benefits into independent contractors. The EEOC’s Bruner said Allstate had acknowledged telling the agents they would not be permitted to work for the company unless they agreed in writing not to sue for any kind of employment discrimination.

Such an action is a form of illegal pre-emptive retaliation, she said in the letter, which urged the company and the agents to begin settlement talks, according to the Times report.

For its part, Allstate has sued the agents for fraud, claiming they got severance or other benefits after agreeing not to sue the company but never intended to honor their agreements. The company says it wants to make its sales force more efficient and is increasing commissions to compensate for the elimination of benefits.

But lawyers for the agents say those independent contractor earnings were not enough to make up for the loss of benefits (reportedly a 2% boost in commission and a one-time $5,000 bonus, according to the AP).

The Allstate Agents Litigation Website is at http://www.allstatecase.com/