N.J. Court Rules in Favor of Allstate in Agency Franchise Lawsuits

By | January 7, 2012

Allstate announced on Friday that the Superior Court of New Jersey has entered judgment in favor of Allstate New Jersey Insurance Company, a wholly owned subsidiary of Allstate Insurance Company, and dismissed all claims in the franchise lawsuits filed against Allstate New Jersey.

Last year, three exclusive agents filed lawsuits seeking to prevent the termination of their agency agreements for failing to meet certain business objectives.They alleged they had franchise relationships with Allstate New Jersey and were protected under the New Jersey Franchise Practices Act. The plaintiffs’ application to stop their termination was denied.

The court determined that the agents were not franchisees and have no protections under the New Jersey Franchise Practices Act. The court noted in its decision that the “insurance industry has never been found by any court in New Jersey, or elsewhere, to be home to an insurance company franchisor, or agent franchisee.”

Allstate has maintained that exclusive agents are independent contractor agents and not franchisees. Allstate said the New Jersey court decision affirms the company’s position.

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