The U.S. Equal Employment Opportunity Commission sued the Allstate Insurance Company on Thursday, after 15 months of trying to settle accusations that the insurer discriminated against its agents.
The suit, filed in United States District Court in Philadelphia, centers on a decision by Allstate to convert its 15,200-member sales force from regular employees with pensions and health-care benefits to independent contractors, according to The New York Times.
To continue as contractors, the agents were required to sign a waiver that they would not sue Allstate. By last June, all but 6,400 of the agents had become contractors. The remaining agents, 90 percent of whom were older than 40, were then dismissed and given the choice of rejoining as contractors or leaving the company.
Several agents filed complaints with the EEOC, accusing Allstate of age discrimination. The agency determined in September 2000 that the waiver was a form of pre-emptive retaliation and that Allstate had violated several laws against discrimination.
The EEOC pressed Allstate to compensate the 6,400 agents and to change its policies, but those negotiations failed. Even so, the agency continued over the last few days to reach a settlement.
"This is not a lawsuit-happy agency," said EEOC spokesman Reginald Welch. "A lawsuit is a measure of last resort."
The lawsuit has the same goals: compensation for the agents and a change in corporate policy.
Although the case was brought before President Bush appointed current chairwoman Cari M. Dominguez last summer, it is likely to further fuel discontent among business executives who think the Bush administration has yet to bring the commission "under control," the Times reports.
The administration has not filled two other vacancies on the five- member commission. As a result, the two sitting Democrats outnumber Dominguez. In addition, the administration has not appointed a general counsel, who helps decide which discrimination cases to bring and how the litigation should be handled.
