Allstate Insurance Co., Northbrook, Ill., today was named in a class-action lawsuit involving 6,400 former insurance agents, alleging the company fired them last year to avoid paying them pension benefits. The suit, filed in a U.S. District Court in Philadelphia, also claims age discrimination. The lawsuit seeks lost benefits that could amount to "hundreds of millions of dollars,” said Daniel Wolf, a partner in the law firm of Sprenger & Lang, which is representing the agents.
Allstate had agreed to rehire the fired agents as independent contractors, ineligible for pension benefits, and about 4,000 agents accepted the company’s offer, Mr. Wolf said. Also, more than 90% of the agents were older than 40 when they lost their jobs last year, the suit claims. "This is a case that really involves the heart of what the Employee Retirement Income Security Act is about,” Mr. Wolf said.
"We completely disagree with the allegations made by the agents and believe the restructuring of our employee-agent work force in November 1999 was lawful and permissible,” said Michael Trevino, spokesman for Allstate. At the time, Allstate had 15,000 agents; 6,400 were employees and the rest were independent contractors, he said.
