ALLSTATE'S WAR AGAINST ITS OWN AGENTS CONTINUES
Allstate insurance agents have scored a significant victory over their company
in a long and closely watched battle over age discrimination, legal experts said
In an order issued late last week in Philadelphia, a federal judge tentatively
agreed to certify the agents' lawsuit as a class action, sharply raising the
stakes in the case and the pressure on Allstate to begin negotiations toward a
settlement, the legal experts said.
"It's a big win for the plaintiffs," said Heather Gerken, a former class-action
lawyer in Washington and an assistant professor at Harvard Law School. Barring
some extraordinary development, she said, it seems likely that the case will be
certified as a class action. A final decision could come within a few weeks.
Allstate, the second-largest insurer of homes and autos after State Farm, said
it planned to wait and see how the case played out. "While the judge has offered
an indication of his intention," said Michael J. Trevino, a company spokesman,
"there is much work to be done."
He said it was "too early in the process to decide whether settlement is
With older workers among the fastest-growing part of the work force, the
Allstate case is being followed by discrimination experts and executives across
the country. The Equal Employment Opportunity Commission has filed a related
lawsuit against Allstate, and AARP has assigned two lawyers to help the agents.
In March, two Democrats in the House of Representatives, Carolyn McCarthy of New
York and Robert Andrews of New Jersey, introduced legislation aimed at
preventing companies from forcing older employees into retirement and denying
them pensions and other benefits, as the agents assert that Allstate did.
If the case is certified as a class-action lawsuit, it could represent more than
6,000 Allstate agents and be one of largest accusing a company of age
In an order last Thursday, Judge John P. Fullam of the Federal District Court
for the Eastern District of Pennsylvania in Philadelphia expressed one
reservation with the agents' certification request: He wanted the number of
plaintiffs reduced to 3 or fewer from 29.
"The problem the judge identified is a minor one," Ms. Gerken said. "So I think
the parties would be fair to read his order as signaling a plan to certify."
The lawsuit by the agents and the E.E.O.C. grew out of a decision announced by
Allstate in late 1999 to streamline its sales force. The following summer, the
company dismissed more than 6,000 agents from a team of 15,200.
The dismissed agents, Allstate said, could continue with the company as
independent agents, doing essentially the same work. But they would no longer
receive health insurance, pensions and other benefits and would have to sign a
release pledging not to sue Allstate.
Some agents complained to the E.E.O.C. about age discrimination, saying that
more than 90 percent of the dismissed agents were over 40 and that their average
age was 50. The agents filed suit in August 2001; a few months later, the
E.E.O.C. also sued Allstate. In February of last year, Judge Fullam denied
motions by Allstate to dismiss both suits.
The lead lawyers representing the agents, Michael J. Wilson of Zevnik Horton and
Michael D. Lieder of Sprenger & Lang, both in Washington, declined to comment.
But class-action experts said the plaintiffs should meet the judge's
"The judge is basically saying, 'I'll certify if you do this,' " said Stephen B.
Burbank, a professor at the University of Pennsylvania Law School. "I would
think it should not be too difficult to do."
Mr. Trevino said Allstate thought the agents and their lawyers had several
choices. "We will need to wait and see what the plaintiffs decide to do in this
case," he said.
Ms. Gerken said the agents' lawyers had every reason to comply with the judge's
order. "The plaintiffs want certification more than anything else," she said,
"because that's where the money is."
Lawyers not involved in the case said that as a class action representing
thousands, the agents' lawsuits could be worth hundreds of millions of dollars
in contrast to perhaps a few million as a suit involving the claims of 29
Mr. Trevino of Allstate noted that the merits of a case were not supposed to be
considered in a decision to certify. While that is technically correct, some
class-action lawyers said judges had been under increasing pressure not to
certify suits lacking in some prospect for success. "If a judge thinks a case is
completely hokie," said Mark Gardy, a partner in the Manhattan firm of Abbey
Gardy, "he's not going to take the time to certify it."