EEOC PRESSURES ALLSTATE TO SETTLE AGENTS' CLASS ACTION.

An Equal Employment Opportunity Commission official stepped up pressure last week on Allstate Insurance Co. to settle the class action filed against it by current and former agents before Sept. 15, when Senior Judge John P. Fullam of the U.S. District Court for the Eastern District of Pennsylvania is scheduled to decide all pending pretrial motions in the case.

In a letter to Allstate, EEOC Kansas City District Office Director Lynn Bruner said the commission had found reason to believe the insurer had discriminated against agents over 40 years old who chose to take lower-paying jobs with the company after June 2000 rather than quit.

Bruner's office refused to disclose the contents of the letter.

But one of the plaintiffs' attorneys, Michael Lieder of Sprenger & Lang law firm in Washington, DC, confirmed Bruner had found the insurer had "no legitimate business purpose" for requiring older agents to wait for one year

after June 2000 before taking these jobs, especially when the wait denied them retirement benefits because it constituted "a break-in-service" under Allstate's

pension plan and when the company used the year to hire younger agents for the available positions.

He said approximately 90 percent of the agents who agreed to remain with the company at the time were 40 years old or older.

Bruner's office now is required under EEOC regulations to pursue settlement with Allstate, but the company issued a statement last week saying it disagreed with Bruner's finding. If Bruner's efforts to settle prove unsuccessful, the Commission can pursue action in federal court.

Bruner's office been unsuccessful in attempting conciliation after two earlier determinations.

In one, it found the company had retaliated against approximately 6,200 agents when it ordered them to quit or sign a release form by June 30, 2000.

In the other, the EEOC office found Allstate discriminated against the agents because of age by trying to convert them from "captive" insurance sales agents to independent contractors, thus affecting their retirement benefits.

When conciliation efforts failed, EEOC filed its own lawsuit on Dec. 27, 2001, and was joined by the AARP Litigation Foundation. All the cases have been consolidated for trial before Judge Fullam as Gene R. Romero et al. v. Allstate Insurance Co., et al. (Civil Action No. 01-CV-6764).

Allstate moved to dismiss on grounds that the agents were employees at will so their employment could be terminated at any time; that the agents who were over 40 could not have been discriminated against on account of age because the company terminated the employment of all agents except those in three states, regardless of age; and that the agents' claims were barred because the agents signed a release agreeing to give up all claims.

Another motion to dismiss was filed by Edward Liddy, Allstate's chief executive officer who, in November 1999, unveiled the company's plan for having the agents choose by June 30, 2000, whether they would stay with the company in lower-paying jobs and reduced benefits or quit. Liddy argued the court in Pennsylvania had no jurisdiction over him.

On Feb. 28, 2002, Fullam denied both Allstate's and Liddy's motions to dismiss. In May, he tentatively agreed to grant the agents' motion for class certification.

Both sides have moved for summary judgment.

In addition to Lieder and Susan Coler of Sprenger & Lang, attorneys for the plaintiffs are: Michael Wilson of DC's Zevnik, Horton office, Steven H. Doto of Zevnik, Horton's Philadelphia office, Thomas Osborne and Mary Ellen Signorille of the AARP Litigation Foundation.

Attorneys for the defendants are Edward Mannino of Akin, Gump, Strauss, Hauer & Feld's Philadelphia office, together with Peter A. Bellacosa of Kirkland & Ellis' New York City office and Richard Godfrey of its Chicago office.