Allstate Corp. has been hit with a lawsuit from the U.S. Equal Employment Opportunity Commission. The suit alleges that the company engaged in age discrimination against its agents.
According to a New York Times report, the suit, filed Dec. 27 in the United States District Court of Philadelphia, comes after more than a year of settlement negotiations.
The suit involves a decision by Northbrook, Illinois-based Allstate 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 decided to become contractors, the newspaper added.
The remaining agents, 90 percent of them older than 40, were dismissed and given the choice of signing on again as contractors or departing the company, the newspaper said.
The newspaper reported some of Allstate’s former employees had been infuriated by the waiver, which they saw as a move in the company’s plan to get rid of its older workers. Several agents filed complaints with the EEOC, accusing Allstate of age discrimination.
In September 2000, the EEOC decided that the waiver was a form of pre-emptive retaliation and that Allstate had violated several laws against discrimination, the newspaper said.
The EEOC pressured Allstate to compensate the 6,400 agents and to modify its policies.
Allstate agents filed their own lawsuit in Philadelphia in August, after the agency was not able to resolve the case, the newspaper added. The sales agents suing Allstate will try to combine their case with the government lawsuit, a lawyer for the plaintiffs said on Friday.