Sprenger & Lang, Zevnik Horton and AARP Announce Update in Class Action Lawsuit Against Allstate.

Business Editors & Legal Writers

PHILADELPHIA--(BUSINESS WIRE)--Dec. 28, 2001

EEOC Also Files Suit; May Seek to Join Current Class Action

The United States Equal Employment Opportunity Commission (EEOC) filed a lawsuit against Allstate Insurance Company yesterday and will seek to consolidate its case with a pending class action lawsuit filed by 29 current and former Allstate agents against the insurance company and Edward M. Liddy, its chairman, president and CEO.

Similar to the agents' case, the EEOC is charging the company with violating the Age Discrimination in Employment Act (ADEA), Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act.

Michael Lieder of Sprenger & Lang, one of the attorneys representing the agents, said, "We welcome the EEOC's involvement. It is gratifying that the agency charged with enforcing this country's anti-discrimination laws agrees with our position on a critical issue in the litigation."

Both lawsuits arise out of Allstate's decision, announced in November 1999, to terminate the employment status of about 6,400 of its sales agents. As part of its program, Allstate presented all of the agents with a release, and informed them that if they signed it they could continue in Allstate's service as independent contractors. Agents who refused to sign the release had their employment terminated on June 30, 2000. Whether they signed the release or not, the agents were deprived of the valuable employee benefits they had been promised by Allstate.

The EEOC alleges that Allstate's tying of the right to continue in the company's service as an independent contractor to execution of the release constituted illegal retaliation in violation of the federal anti-discrimination laws. The EEOC lawsuit seeks monetary damages and injunctive relief for the agents, more than 400 of whom filed charges of discrimination and retaliation against Allstate with the agency after the termination program was announced.

The agents' suit is more sweeping. Like the EEOC, the agents allege that the release was illegal under a variety of theories. In addition, they claim that the terminations violated their rights under the Employment Retirement Income Security Act (ERISA), the ADEA, and the common law. They allege that Allstate implemented the program in an attempt to rid itself of the obligation to pay hundreds of millions of dollars in employee benefits each year and to eliminate a workforce in which 90% of its members were over the age of 40. Their class action seeks monetary and injunctive relief totaling in the hundreds of millions of dollars.

The EEOC's filing is just the latest development in the litigation arising out of Allstate's termination of the agents. It follows on the heels of last Thursday's announcement by AARP Foundation Litigation that two of their staff attorneys, Tom Osborne and Mary Ellen Signorille, have joined the agents' lawsuit as co-counsel to the plaintiffs and the class. On October 30, 2001, the agents moved for approval of their proposed class action. Briefing concerning that motion is pending.

Gene Romero, the lead plaintiff in the class action lawsuit and the first of nearly 400 agents who filed complaints with the EEOC charging Allstate with age discrimination and retaliation stated, "I am delighted that EEOC Chair Cari M. Dominguez has listened to us and is standing behind the Commission's determination that Allstate cynically violated the law in obtaining thousands of releases by means of coercion, intimidation and duress."

The agents' complaints against Allstate are not limited to the termination of their employment. Mr. Romero and 31 other plaintiffs filed a second class action lawsuit against Allstate in federal district court in Philadelphia on December 20 (the same day that AARP announced its involvement in the disputes) alleging that the company violated ERISA by reducing, and eventually eliminating, eligibility for early retirement benefits. This suit seeks hundreds of millions of dollars in lost benefits for agents who were improperly denied early retirement or received reduced early retirement benefits.

Michael J. Wilson of Zevnik Horton, another lawyer representing the Romero plaintiffs, added that the second lawsuit "provides yet further evidence that Allstate executives spent the better part of the last decade trying to rid the company of the cost of providing the pension and other benefits, which had been promised to thousands of its insurance agents and which had been held out as a means of inducing them to spend tens or hundreds of thousands of dollars from their own pockets to invest in developing a book of business."

ABOUT THE FIRMS

Sprenger & Lang, with offices in Washington, D.C. and Minneapolis, Minnesota, primarily represents employees and other aggrieved individuals in class action and other complex multi-plaintiff litigation across the nation.

Zevnik Horton provides national representation in a variety of complex litigation matters, including environmental law, insurance coverage, commercial litigation, and in a variety of transactional matters involving tax, securities, media, broadcasting and real estate from nine offices throughout the United States and in the United Kingdom.

AARP is a non-profit, non-partisan membership organization for people 50 and over. It provides information and resources; advocates on legislative, consumer and legal issues; assists members to serve their communities; and offers a wide range of unique benefits, special products and services for its members. These benefits include AARP Webplace at http://www.aarp.org, Modern Maturity and My Generation magazines, and the monthly AARP Bulletin. Active in every U.S. state and territory, AARP celebrates the attitude that age just isn't a number -- it's about how you live your life.

For further information, please contact the persons listed above or visit the website concerning the agents' case at www.allstatecase.com.