Federal agency accuses Allstate of coercing, intimidating its life insurance agents

Sunday, May 19th 2002, 12:00 am
By: News On 6

PHILADELPHIA (AP) _ A federal agency has accused Allstate Insurance Co. of unlawfully intimidating 650 life insurance agents who lost health and pension benefits when they were switched from Allstate employees to independent contractors.

The accusation mirrors one leveled earlier by the Equal Employment Opportunity Commission on behalf of 6,500 other agents.

Allstate switched the 650 agents' work status in 2000 and 2001. At the time, the agents were told they could not work as company contractors unless they signed a release prohibiting them from suing for any past discrimination, according to the EEOC.

The prohibition amounted to ``unlawful interference, coercion and intimidation,'' the commission said a May 10 letter to the company which was obtained by The New York Times.

Allstate spokesman Michael Trevino on Saturday said the company does not believe it did anything wrong.

``We continue to be open to discussions with the EEOC, we continue to have disagreements with them, and those disagreements are fundamental in nature,'' he said.

The finding covers 650 agents around the country who sold only life insurance. In December, the EEOC sued Allstate in Philadelphia alleging similar treatment of 6,500 agents who sold auto, home and life policies.

That suit has been combined with an earlier class-action suit filed by the agents. Allstate, the nation's second-largest insurer, has countersued the agents.

The company has said it wanted to spin off its sales force to improve efficiency, and that it increased commissions to make up for the agents' lost benefits.

The agents in their suit said Allstate released them as part of a plan to save $325 million a year. They said their 2 percent commission hike and one-time, $5,000 bonus did not compensate them for lost benefits.