FOR
BREAKING NEWS CLICK HERE.
June 2, 2008
Today, the Romero plaintiffs and EEOC each filed briefs in connection with the appeals taken from Judge Fullam’s decision of June 20, 2007, which granted summary judgment in favor of Allstate. Copies of the briefs can be downloaded by clicking here and here. Allstate will file its opposition within 30 days.
May 6, 2008
On June 20, 2007, the United States District Court for the Eastern District of Pennsylvania issued an order reversing its earlier ruling of March 30, 2004, in which it had concluded the Release and Waiver Agreement that Allstate required employee agents to sign as part of the "Preparing for the Future" Group Reorganization Program was retaliatory and in violation of applicable federal law and could be voided at the option of each employee agent who signed the Release. In addition to vacating its ruling concerning the validity of the Release, the District Court adopted the "tentative conclusions" set forth in its order dated March 21, 2007 (which is discussed below) and, as a result, granted summary judgment in favor of Allstate as to the discrimination and retaliation claims asserted by the plaintiff employee agents under the Age Discrimination in Employment Act and Employee Retirement Income Security Act. Finally, the District Court indicated its intention to close the case files.
Plaintiffs, together with the United States Equal Employment Opportunity Commission, have taken an appeal from the District Court's ruling and, in accordance with the scheduling order issued by the United States Court of Appeals for the Third Circuit will be filing briefs with the Court of Appeals by June 2, 2008. Allstate will have to file responsive briefs within 30 days. Copies of the parties' briefs will be posted after they are filed.
May 24, 2007
Plaintiffs have filed a Notice of Supplemental Authority to bring to Judge Fullam's attention a controlling decision issued by the United States Court of Appeals for the Third Circuit on May 14, 2007. Plaintiffs believe that this decision, known as Jakimas v. Hoffman-La Roche, Inc., demonstrates not only that the Court was wrong in imposing a "tender back" requirement with respect to the Release in its ruling of March 30, 2004, but also that the Court should not rule as a matter of law that execution of the Release was knowing and voluntary, that the Release was not part and parcel of an illegal scheme, or that the Release was not unconscionable and in violation of public policy. Plaintiffs argue further that Jakimas instructs that the Court should not dismiss the claims arising under Section 510 of ERISA without first affording plaintiffs the opportunity to conduct merits discovery. Because Judge Fullam limited additional briefing relating to the tentative conclusions issued on March 21, 2007, to 10 pages, plaintiffs have filed a motion asking the Court to accept for filing a supplemental memorandum that discusses the import of the Jakimas decision in greater detail.
April 2, 2007
The proposed class action lawsuit brought by 29 plaintiffs, known as Romero I, seeks to recover pension, medical and other benefits estimated in the hundreds of millions of dollars, as well as compensatory and punitive damages and other relief, on behalf of about 6,200 current and former Allstate agents. The plaintiffs have alleged that the company betrayed its long-time "captive" employee agents by wrongfully terminating their employment contracts in order to deny them pension and other employee benefits and to rid itself of thousands of older employees. The suit claims that Allstate's actions taken as part of the "Preparing for the Future" Group Reorganization Program violated the Employee Retirement Income Security Act ("ERISA"), the Age Discrimination in Employment Act ("ADEA"), and Allstate's contractual and fiduciary duties. The plaintiffs also allege that Allstate wrongfully refused to rehire any of the terminated employee agents for a period of one year to reduce retirement benefits that former agents could earn in the future.
The U.S. Equal Employment Opportunity Commission has filed two lawsuits against Allstate on behalf of affected agents. The first, filed in December 2001, alleges that Allstate violated the anti-retaliation provisions of the ADEA, Title VII of the Civil Rights Act and the Americans with Disabilities Act by forcing its employee agents to sign a release and waiver that the EEOC previously determined to be unlawful. The EEOC's lawsuit has been consolidated with Romero I. The second lawsuit, filed in October 2004, alleges that the one-year "rehiring moratorium" adopted by Allstate constituted a pattern and practice of unlawful age discrimination. According to the EEOC, the refusal to rehire employee agents had the intended effect of depriving individuals of the ability to continue to accrue the substantial pension and other benefits to which they had been entitled without a "break in service."
On March 30, 2004, Senior District Judge John Fullam granted partial summary judgment in favor of plaintiffs in Romero I, holding that the release violated the ADEA because it barred the filing of "charges," including challenges to the validity of the release. As Judge Fullam observed, "we have no way of knowing how many other employee-agents failed to pursue charges before the EEOC simply because they accepted the release language at face value." The Court held further that Allstate had engaged in unlawful retaliation under the ADEA, Title VII and other laws in order to prevent agents from exercising their federally-protected rights. As part of its ruling, however, the Court concluded, based on the limited record before it, that there was "no basis" for plaintiffs' age discrimination claims. Although the Court did not actually dismiss the ADEA claims, it held that agents who desire to have the release invalidated and pursue claims for damages or other relief would first have to repay or "tender back" to Allstate "any and all benefits received by the signer in exchange for the release."
Plaintiffs filed a motion in April 2004 asking the Court to reconsider the "tender back" requirement. The EEOC also filed its own motion asking that the Court clarify its ruling.
In December 2005, Allstate filed a summary judgment motion asking the Court not only to reconsider its March 2004 decision and reverse itself by upholding the release. Allstate also is asking the Court to dismiss the claims the Romero plaintiffs are prosecuting under the ADEA and ERISA, including the claim that the release constitutes unlawful retaliation. CEO Liddy has joined in the request for summary judgment. Plaintiffs and the EEOC have opposed the motion on numerous grounds. In a 48-page brief filed with the Court under seal, plaintiffs lay out the reasons that Allstate is not entitled to seek reconsideration of the March 2004 ruling at this late date and, in any event, is not entitled to dismissal of the ADEA and ERISA claims or, indeed, any of their claims as a matter of law. In further support of their arguments, plaintiffs note, among other things, that they have not been able to undertake "merits" discovery because of Allstate's unjustified refusal to produce documents responsive to their discovery requests. Plaintiffs therefore have requested that the Court deny the motions for summary judgment and that it instead grant the relief requested with respect to the "tender back" requirement in the motions that have been pending since April 2004.
Judge Fullam has denied
plaintiffs' motion for reconsideration and, in a ruling
dated March 21, 2007, advised the parties that he has reached a number
of tentative conclusions in this case, the EEOC case and Romero II. As set
forth in the memorandum opinion issued by the Court, Judge Fullam stated that
he had concluded that his March 2004 ruling was "in error" insofar
as he found that the Release was voidable and, in light of other tentative
conclusions set forth in his ruling, that "the validity of the release
has become moot." With respect to the other tentative conclusions, Judge
Fullam stated that a 2005 decision issued by a United States Court of Appeals
in Isbell v. Allstate Ins. Co. "warrants the conclusion that plaintiffs'
claims of ERISA violations, age discrimination and retaliation must fail."
It therefore appears that it is Judge Fullam's intention to uphold the Release
and, in addition, dismiss the federal law claims brought under the ADEA and
ERISA. Judge Fullam nevertheless has invited the parties to submit additional
briefs that bring to the Court's attention any issues that he may have overlooked,
as well as any argument or "other factor" that impugns the decision
in Isbell. Plaintiffs believe that the tentative conclusions reached by Judge
Fullam are not correct and will file a brief that attempts to explain why
he is in error. We will keep you advised of any further rulings from the Court.
Please
check back frequently for additional information or updates.
©2002-2008 Morgan, Lewis & Bockius LLP, Sprenger & Lang PLLC and AARP Foundation Litigation