Allstate Disappointed with EEOC Decision to Sue

January 1, 2002

The Allstate Corporation announced in a company release it was displeased with the Equal Opportunity Commission’s decision to file a lawsuit against its Allstate Insurance Company subsidiary, which recently reorganized its agency system.

“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,” said Rick Cohen, president of Allstate Property and Casualty. “In fact, Allstate has been recognized on many occasions for this commitment and its employment practices.”

Specifically, the EEOC is suing because of Allstate’s use of a release as part of its agency program reorganization undertaken in 2000. The EEOC maintains that conditioning certain financial benefits, including the opportunity to participate in Allstate’s most successful agency program, on the signing of a release constitutes retaliation under various federal employment laws. Allstate denies these allegations.

“The Allstate new business model strategy and agency program reorganization were 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,” noted Cohen. “As a result, both Allstate and our agencies are better positioned for success in an increasingly competitive environment. The Allstate Exclusive Agency program is consistent with the structures of many of our major competitors.

“Under the Allstate enhanced Exclusive Agency program, agents are economically advantaged through an increased commission structure, commission opportunities from direct channel sales, the ability to purchase agencies, a stock bonus plan, the ability to grow a transferable equity in their business, the ability to run satellite offices, local agency extensions and the ability to run other businesses.”