EEOC Finds Allstate Guilty Of Bias
By Gary Mogel
NU Online News Service, August 28, 1:59 p.m. EDT?The Equal Employment Opportunity Commission has found that Northbrook, Ill.-based Allstate Insurance Company is guilty of age discrimination against 6,200 agents.
A determination letter issued by the EEOC's St. Louis, Mo. regional office, found the company's reorganization plan had violated the Age Discrimination in Employment Act with its impact on agents age 40 and older.
Many older agents were terminated as part of Allstate's "Preparing for the Future" reorganization plan.
The plan, designed to convert agents into independent contractors, had a one-year waiting period before terminated agents could be rehired for other positions. Those agents were not allowed to retain their original hire date and the benefits connected to that date.
Over 94 percent of the agents terminated pursuant to that plan were age 40 or older, according to the EEOC's letter. The one-year waiting period and service date/benefit rules did not apply to any other employees, the EEOC alleged. Also, 84 percent of employees hired to staff Allstate's call centers–which partially replaced services formerly provided by agents–were under age 40, the EEOC noted.
Ron Harper, a current Allstate agent in Thomson, Ga. and one of the charging parties in the EEOC's lawsuit, said that Allstate's actions were motivated by management's desire to avoid benefit costs associated with the older agents.
"To my knowledge, no one over 40 was rehired during that one-year period," Mr. Harper noted. He added that those agents lost not only their jobs, but their 401(k) plan with matching contributions, vacations, and other benefits.
Michael Trevino, a spokesperson for Allstate, said the rehire policy had nothing to do with age. The terminated agents remain eligible for rehire, regardless of their age, according to Mr. Trevino.
But according to Mr. Harper, "Allstate hasn't hired any employee-agents since about 1990. At that time, they converted the agents to independent contractors, supposedly in order to cut costs."
In the EEOC's view, the agents meet the ADEA's definition of "employee," even though Allstate calls them independent contractors.
The EEOC has requested that Allstate enter into conciliation talks in an attempt to settle this dispute. If a settlement cannot be reached, EEOC can sue on behalf of the agents for money damages and/or a change in Allstate's policy. The EEOC as an alternative can issue the agents a "right to sue" letter so they can pursue their claims in court.
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