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NORTHBROOK, Ill.—Allstate Insurance Co. has agreed to pay $4.5 million to about 90 former employees to settle an age discrimination class action lawsuit, said the U.S. Equal Employment Opportunity Commission on Friday.
The litigation with the EEOC, which was filed in 2004, stems from the Northbrook, Ill.-based insurer's efforts in 2000 to convert its 15,000-member agent workforce to independent contractors from regular employees.
The EEOC said Allstate had adopted a hiring moratorium for a period of one year, or while severance benefits were being received, that had a disproportionate impact on workers over age 40 because more than 90% of the agents subjected to it were in that age group. Allstate has denied that its hiring moratorium violated the Age Discrimination in Employment Act of 1967.
An Allstate spokesman said in a statement that “while confident that we acted appropriately,” the insurer decided to settle the dispute “to avoid the burden and considerable expense of continued litigation for everyone involved.”
The spokesman said Allstate believes “its position is correct and that it would have ultimately prevailed in this case. The court has indicated, and the EEOC acknowledges, that the dispute is centered on a point of law over which there is substantial ground for difference of opinion.”