The Equal Employment Opportunity Commission has concluded that the Allstate Insurance Company illegally discriminated against about 650 life insurance agents even as it negotiated to settle similar charges involving thousands of agents who sell auto and home insurance.
The company had required agents to convert from being employees with health and pension benefits into independent contractors, according to a May 10 letter that EEOC District Director Lynn Bruner wrote to both sides in the dispute.
Allstate, she wrote, acknowledged telling the agents they would not be permitted to work for the company unless they agreed in writing not to sue for any kind of employment discrimination.
That amounts to illegal pre-emptive retaliation, Bruner wrote.
Allstate engaged in "unlawful interference, coercion and intimidation," Bruner declared, urging the company and the agents to begin settlement talks.
The New York Times, in publishing the correspondence, notes that for nearly two years, Allstate has been fighting similar claims that it forced thousands of auto and home insurance agents to become independent contractors.
Those agents sued Allstate in Federal District Court in Philadelphia in August. In December, the EEOC also sued Allstate.
Allstate has in turn sued the agents for fraud, saying they got severance or other benefits after agreeing not to sue the company but never intended to honor their agreements.
Allstate lawyer Susan Rosborough told the Times that her client, the country's second-largest seller of auto and home insurance after State Farm, treated its agents properly and legally. The company says it wants to make its sales force more efficient and is increasing commissions to compensate for the elimination of benefits.
But Michael Wilson, the lead lawyer in the agents' private suit, said their earnings as independent contractors were not making up for the losses in benefits.
The initial complaints from the home and auto insurance agents were based on age discrimination. More than 90 percent of them were more than 40 years old. More than 80 percent of the life insurance agents are that old. Both of the commission's cases cover a wide range of employment discrimination offenses.
Lawyers who specialize in suing corporations on behalf of workers portrayed Allstate as arrogant in its persistence. "If an employer gets a finding based on a certain type of practice, normally, you would expect the employer to be very cautious about doing it again," said L. Steven Platt, a Chicago lawyer who is president of Workplace Fairness, a group that provides information to workers.
But Ms. Rosborough said Allstate continued converting employees into contractors under the belief that the commission was wrong. "We don't understand their theory of retaliation," she said.
