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A Case of EEOC Confusion
News from NAPAA –
September 15, 2009, NAPAA Headquarters
NAPAA has received numerous inquiries regarding the EEOC announcement that a settlement agreement had been reached with Allstate in the “hiring moratorium’ case filed in 2004. The settlement of $4.5 million will be paid to about 90 claimants.
The EEOC lawsuit filed in October 2004 alleges that the one-year "rehiring moratorium" adopted by Allstate constituted a pattern and practice of unlawful age discrimination. According to the EEOC, the refusal to rehire employee agents had the intended effect of depriving individuals of the ability to continue to accrue the substantial pension and other benefits to which they had been entitled without a "break in service."
The agents that are party to this case signed the waiver and then took the severance package instead of the EA contract. Then they either attempted to, or intended to, go back to work for Allstate as employees in other jobs, such as filling positions in the claim department or call centers. Those who did apply for other positions, however, were turned down because Allstate suddenly imposed a one year ban on hiring former employee agents. This new policy was hastily developed after the Preparing for the Future initiative was implemented, presumably to prevent agents from continuing to accrue their pension and other benefits, which is only possible when “break in service” is less than 12 months.
The $4.5 million settlement averages out to $50,000 per claimant. Affected agents are expected to receive between $9,000 and $114,000. Individual settlement amounts will be determined by the court. Considering the loss of potential pension accruals and other damages suffered by the affected agents, NAPAA views the settlement as woefully inadequate.
For a copy of the settlement agreement, click here.
It is important to understand that this is not the 2001 EEOC case that was later consolidated with the Romero I case – a case which is still ongoing.
The other EEOC case, which is still alive and well, is now referred to as Romero I. It alleges that Allstate violated the anti-retaliation provisions of the ADEA, Title VII of the Civil Rights Act and the Americans with Disabilities Act by forcing its employee agents to sign a release and waiver that the EEOC previously determined to be unlawful.
The lawsuit brought by 29 plaintiffs known as Romero I, seeks to recover benefits estimated in the hundreds of millions of dollars, as well as compensatory and punitive damages and other relief, on behalf of about 6,200 current and former Allstate agents. The plaintiffs have alleged that the company betrayed its long-time "captive" employee agents by wrongfully terminating their employment contracts in order to deny them pension and other employee benefits and to rid itself of thousands of older employees. The suit claims that Allstate's actions taken as part of the "Preparing for the Future" Group Reorganization Program violated the Employee Retirement Income Security Act ("ERISA"), the Age Discrimination in Employment Act ("ADEA"), and Allstate's contractual and fiduciary duties.
On July 29, 2009, the United States Court of Appeals for the Third Circuit issued a per curium (unanimous) opinion of this case in which it vacated Judge Fullam's ruling of June 20, 2007, wherein he had dismissed all of the claims that had been asserted in the Romero and EEOC cases, and directed that, upon remand to the trial court, the case be reassigned.
NAPAA is waiting for the announcement of the judge to be assigned to the case.