AARP Lends a Hand in Employee Suit Against AllState

The suit alleges that Allstate severed employment contracts with 6,400 company agents, seeking to deprive the agents of their benefits and rid the company of older workers in its ranks. These actions violated the company’s statutory obligations under the Age Discrimination in Employment Act (ADEA) and Employee Retirement Income Security Act (ERISA), according to the suit.

AARP Foundation attorneys have joined forces with Sprenger & Lang PLLC and Zevnik Horton LLP in order to represent the plaintiffs.

The plaintiffs argue in the suit that throughout the 1990s Allstate unsuccessfully sought to persuade its employee agents to relinquish their protected status as employees and convert to independent status.

They also contend that the company’s goal was to affect a mass termination plan to allegedly save the company more than $200 million a year. But, the plaintiffs stated that only a few agents were willing to give up their employment status the generous benefit package it came with.

So, the suit alleges that in November of 1999, Allstate announced that agents would basically be terminated and would only be allowed to remain with the company as “independent contractors” if they waived their right to bring a lawsuit.

According to the complaint, Allstate’s actions led more than 99 percent of its employee agents to sign the release, a release that allegedly violates ERISA and ADEA and is unenforceable.
The plaintiffs say that the second reason for the termination program was to transform the sales force from one in which approximately 90 percent were over 40 to one infused with younger agents and other sales personnel.

The Equal Employment Opportunity Commission (EEOC) has issued a determination that Allstate engaged in “threats, coercion and intimidation” and that forcing the agents to sign the release violated the ADEA.