October 20, 2006
Judge Says Jury Must Hear Age Bias Case Against Allstate
By JOSEPH B. TREASTER

A federal district judge in St. Louis ruled yesterday that a jury must hear evidence on whether the Allstate Insurance Company discriminated against older insurance agents when it adopted a plan seven years ago to cut costs and streamline the company’s operations.

Allstate had been arguing for years that the case was groundless and should be dismissed.

In the decision, Federal District Judge E. Richard Webber said that lawyers for the Equal Employment Opportunity Commission had presented strong enough evidence of discrimination that “a reasonable jury could find” that Allstate violated anti-discrimination laws. He said that in arguing for a dismissal, Allstate had “not presented sufficient evidence to rebut this claim.”

The judge said that the government would have to prove in court that Allstate had acted improperly.

The judge did not set a date for a trial, but government lawyers said the timing of a trial could be part of a conference with both sides that he has scheduled for today.

Michael J. Trevino, a spokesman for Allstate, said that the company’s treatment of its agents was appropriate and legal. “We continue to believe our agent reorganization program was lawful and did not discriminate against any individual because of age or any other factor,” he said. “We’re disappointed with the judge’s ruling.”

Felix Miller, a senior trial lawyer for the E.E.O.C., said that government lawyers “fully expect to be able to prove” that Allstate’s policy was improper.

Allstate agents began complaining to the federal agency of age discrimination shortly after the company decided in 1999 to dismiss nearly 6,500 career agents and offer them jobs as independent contractors. The agents said that 94 percent of those dismissed were 40 years old or older.

The E.E.O.C. determined in September 2000 that the insurer had violated anti-discrimination laws by requiring those agents who chose to become independent contractors to sign a wavier promising that they would not sue the company. Employment lawyers said companies may require such waivers, but not as a condition of future employment. The agency said the waiver was a form of illegal retaliation.

Negotiations between the E.E.O.C. and Allstate over the compensation of the agents broke down and the agency filed a federal discrimination lawsuit against the company in late 2001. The agents had already filed their own civil lawsuit in August of that year contending that Allstate had illegally stripped them of employee benefits and pushed them out because of their age. Allstate denied the assertions.

A federal judge in Philadelphia combined the two lawsuits, and that case is still pending. Two years ago the government agency filed the age discrimination lawsuit that Judge Webber ruled on yesterday.

Robert Johnson, the lawyer in charge of the E.E.O.C.’s St. Louis office, said the judge’s decision “was a landmark ruling in the development of age discrimination law.”

In an interview, Mr. Johnson said it was would be one of the first cases to go to trial after a United States Supreme Court decision last year that broadened the basis for age discrimination claims.

Copyright 2006 The New York Times Company