Group of Allstate Agents Votes to Unionize

A group of Allstate agents who say the insurer controls them like employees rather than as independent contractors voted to affiliate with a union — a move the agents hope will help dissolve some of their concerns over employment status.

Members of the Gulfport, Miss.-based National Association of Professional Allstate Agents (NAPAA) approved overwhelmingly to affiliate with the Office and Professional Employees International Union (OPEIU), AFL-CIO. Secret ballots were mailed to the NAPAA’s 1,200 members and more than 94 percent voted in favor of affiliating with OPEIU, according to the association. The vote was administered by the American Arbitration Association (AAA) and was counted at the AAA’s New York office.

NAPAA membership, which represent about 10 percent of Allstate’s nationwide agency force, decided to join OPEIU after claiming the insurer has been manipulating its independent contractor rules, terminating long-time agents, cutting agency compensation, and driving down agent morale.

The vote gives NAPAA permission to form a guild, which would then affiliate with OPEIU, which has 125,000 members and is itself tied to the AFL-CIO.

“Our members have sent a message and we hear them loud and clear,” said Jim Fish, NAPAA executive director. “Now we will work closely with OPEIU to finalize an affiliation agreement that establishes NAPAA as a guild.”

Forming a guild of self-employed workers would give NAPAA members more legislative access and lobbying resources to advance their interests but it would not give them any collective bargaining leverage with the insurer, according to Nicole Korkolis, communications director for OPEIU.

Allstate doesn’t appear concerned over the vote adding that the move to affiliate with OPEIU is more of an internal issue. The insurer also again pointed out that NAPAA’s members represent “only a small number of Allstate’s current agency owners.”

Allstate added that the insurer seeks to maintain a strong and productive working relationship with its independent contractor agents. “We know that agencies of a certain size are better able to provide the superior customer experience our customers tell us they need. With this in mind, we have set long-term growth and performance goals to put more agencies on a trajectory toward this agency size and we’re working closely with agency owners over time to ensure they understand where the agency stands, how they can reach the model and how we will support them in the process,” the insurer said in a statement to Insurance Journal.

The NAPAA Board of Directors is expected to meet in the near future to formally approve the affiliation. Once the agreement is approved, NAPAA members will be granted membership in OPEIU, the national AFL-CIO and all State Federations of Labor.

“Affiliating with OPEIU is the first step toward ensuring that Allstate agents are treated as true independent contractors instead of employees,” said Fish. “Currently, agents are subjected to unachievable quotas, the specter of reduced compensation and an ever-present threat of contract termination. Many companies today are circumventing IRS precepts regarding employee status and are now classifying these same people as independent contractors. This practice has to stop.”

However, Allstate argues that courts and the IRS have recognized the independent contractor status of its agents. “Allstate’s agents’ status as independent contractors has been reviewed and consistently affirmed by the Internal Revenue Service, National Labor Relations Board, Equal Employment Opportunity Commission and several federal courts,” the insurer told Insurance Journal in a statement.

The company also disputes the claims of a high number of terminations and low morale, maintaining “growth opportunities have never been better” for its exclusive agents. But added that they are reviewing agency owner compensation to create a model that better rewards higher performing agencies and aligns more closely with competitive industry practices.

“We’ve solicited input from more than 300 agency owners in regional and national focus groups and based on their feedback we are working to create a model to better reflect the needs of our agencies,” the insurer told IJ. “The plan is still being finalized and we will continue to work with agencies.”

Topics Carriers Agencies Contractors