EEOC SUES, AllSTATE DISAPPOINTED

The Allstate Corporation has expressed its displeasure with the Equal Opportunity Commission’s (EEOC’s) lawsuit against its Allstate Insurance Company subsidiary over an agency system reorganization. The EEOC sued Northbrook, Ill. based Allstate because of its use of a release that conditions certain financial benefits, including the opportunity to participate in Allstate’s most successful agency program, on the signing of the release. Under its reorganization plan Allstate decided to switch its 15,200-member sales force from regular employees to independent contractors. To stay on as contractors, the agents were required to sign a release that they would not sue Allstate, and by June all but 6,400 of the agents had chosen to become contractors, according to the New York Times. The EEOC contends that the release constitutes retaliation under federal employment laws. The suit also alleges that the company engaged in age discrimination against its agents. Allstate denied the charges. Stating, “Allstate values its positive relationship with the EEOC and believes that we are both committed to the same goals of equal opportunity and work force diversity,” Rick Cohen, president of Allstate Property and Casualty added that the company’s new business model and agency program provides an economic advantage for agents. He said the program reorganization was designed to “meet the increasing demands of our customers, jump-start growth and make it possible for every agent to share in the success of the company.” He also noted that the structure of the agency program resembles that of many of the company’s major competitors.

Topics Lawsuits Agencies Allstate