Allstate Agents Pin Hopes on ERISA Charges Following Dismissal of Age Discrimination Complaint

Despite a federal judge throwing out their high-profile class action age discrimination claim against Allstate Insurance Co., lawyers for the 6,400 agents say they are happy with the decision overall because it permits their ERISA (Employee Retirement Income Security Act) claims for breach of contract and breach of fiduciary duty to go forward.

In Philadelphia, U.S. District Judge John P. Fullam rejected the group’s age discrimination case against the insurer, deciding it was invalid “for the simple reason that employees of all ages were treated alike.”

“An employer who visits adverse consequences upon all employees, irrespective of age, cannot be held liable for age discrimination,” wrote the judge, adding that whether many of the “affected employees, or even a majority, are within the protected age group, is irrelevant.”

Approximately 90 percent of the employee-agents were over age 40, and the median age was 50, when Allstate reorganized in 2000, according to the complaints.

Allstate has all along said it was just trying to cut costs and never engaged in age discrimination.

The judge also rejected the agents’ complaints about their loss of pension benefits.

However, the agents had more success in their other major class action complaints that Fullam’s ruling now allows to proceed. These include allegations that the company violated labor law and committed a breach of contract when it laid them off and then rehired them as independent contractors and when the company pressured agents to sign a release waiving their right to sue for discrimination.

Fullam gave the agents the option of voiding the waivers within the next 90 days and forfeiting whatever financial rewards they were given for signing it in the first place.

Michael Lieder of Sprenger & Lang law firm, one of the Washington, D.C. law firms representing agents, expressed optimism over the final outcome of the remaining portions of the case.

“Overall, we are pleased with Judge Fullam’s decision yesterday,” Lieder told Insurance Journal. “He ruled on numerous issues. Most of the rulings favored our clients, the insurance agents. He declared voidable the release that the agents were virtually forced to sign, removing Allstate’s primary defense to their claims. While we regret that Judge Fullam dismissed one of the claims, for age discrimination, he allowed the agents to proceed with their claims under ERISA and for breach of contract and breach of fiduciary duty. Based on his rulings, we are confident that we will ultimately prevail in this case.”

The American Association of Retired Persons and the federal Equal Employment Opportunity Commission (EEOC) had argued with the plaintiffs in several of the complaints.