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An appeals court has reaffirmed dismissal of retaliation charges against Allstate Insurance Co. by the U.S. Equal Employment Opportunity Commission in connection with conversion of its agent workforce to independent contractors.
According to Friday’s ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia in Equal Employment Opportunity Commission v. Allstate Insurance Co., the case revolves around a series of moves the insurer made to change the way it sells insurance.
In 1990, Northbrook, Illinois-based Allstate introduced a program under which all new Allstate agents worked as independent contractors rather than at-will employees, according to the ruling.
In November 1999, the insurer also gave 6,200 employee-agents who would be terminated the following year various options, including the opportunity to convert to independent contractor status, upon which they would receive a bonus of at least $5,000, among other benefits.
They were required, however, to sign a release of all legal claims against the company. Several agents filed individual and putative class actions against Allstate.
They were joined by the EEOC, which filed a civil action of its own, charging the insurer with illegal retaliation because it allowed the agents to continue their careers only if they waived any discrimination claims, according to the ruling.
The U.S. District Court in Philadelphia initially granted summary judgment to Allstate in both cases in 2007, but the 3rd Circuit vacated those rulings in 2009 because they were “inadequately reasoned and insufficiently supported the evidence,” said the appellate court.
The case was then remanded and handled by another judge, who consolidated the cases and granted Allstate summary judgment in the EEOC’s retaliation suit. The judge held the conversion option “was not facially retaliatory because the policy did not discriminate on the basis of any protected trait,” the appellate ruling said.
The three-judge panel unanimously agreed.
“Allstate followed the well-established rule that employers can require terminated employees to waive existing legal claims in order to receive unearned post-termination benefits,” said the appellate panel in upholding the case’s dismissal.
“The EEOC has neither given us reason to craft an exception to this rule, nor articulated a valid retaliation claim under the relevant statutes.”
The Equal Employment Opportunity Commission has reached a $102,048 settlement with Kmart Corp. over its drug screening policy with regard to an applicant with kidney disease, which is the third such suit it has settled.