Case Updates

IMPORTANT NEW DEVELOPMENTS

October 11, 2014

The litigation has had several significant developments since our last posting on May 30.

Judge Buckwalter has decided that there will be several trials in which juries will determine whether the Release that the named Plaintiffs signed is valid. He has not yet decided whether each trial will concern eight or ten Plaintiffs. The first trial will start May 18, 2015, and a second trial will commence September 28. The third (and possibly fourth) trials are not yet scheduled. This structure contemplates that there could be a verdict that the Release was valid as to one Plaintiff and invalid as to another, instead of the same verdict for all employee agents. The parties will submit briefs October 20 concerning the structure of these trials.

The reason that the trials concerning the validity of the Release relate only to the named Plaintiffs is that Judge Buckwalter denied our motion to certify a class of approximately 6200 former employee agents to challenge the validity of the Release. Our prior posting contained a link to our initial brief in support of class certification; click on the links to access Allstate's opposition and our reply brief.

In the meantime the EEOC is proceeding with its appeal of Judge Buckwalter's decision in March 2014 that the Release was not illegally retaliatory. The EEOC's has filed its brief to the Third Circuit Court of Appeals and Allstate has filed an opposition. We will post the EEOC's reply brief after it is filed.

May 30, 2014

Last Friday, May 23, 2014, we filed a motion and supporting documents asking the judge to allow plaintiffs to litigate most of their challenges to the validity of the Release on behalf of the over 6200 employee agents who signed the Release as part of the so-called "Preparing for the Future Group Reorganization Program" in 2000. If the judge grants the motion, the outcome of the trial on the validity of the Release will affect the rights of all of those agents. If the judge "certifies" the class and the jury determines at trial that the Release is invalid, then the ruling will benefit all employee agents. On the other hand, if the jury found against us at trial, then there would be no classwide challenges to the validity of the Release for any class members. There then would be only challenges based on the individual circumstances of each agent.

If the judge grants the motion and a class trial on the validity of the Release occurs, all 6200 employee agents will not have to testify at trial. Instead, we will try to present sufficient evidence to convince the jury that the Release was invalid as to everyone. We believe that only a small number of agents will have to testify at trial.

But if the judge denies our motion and there is thus no class trial on the validity of the Release, the nature of the trial(s) that will occur is unclear. Possibly there would be a series of trials as to the validity of the Release as to each person whom we represent.

Allstate's opposition to our class certification motion is due in late June, and our reply in support of class certification is due in July. We do not know when the judge will rule on the motion, but we realize that this motion is important to many people, and we will post it as soon as received.

Click here to review the motion papers.

May 1, 2014

Yesterday the New York Times ran an article about the case on the first page of its Business section as well as on its online edition. The article featured quotes from three of the named plaintiffs -- Nathan Littlejohn, Craig Crease and Ron Harper -- and does a good job of making the facts of the case understandable to readers.

April 14, 2014

Two significant developments occurred in the case last week.

First, Judge Buckwalter issued an Opinion and Order on April 7 on each party's motion for clarification and/or reconsideration of his Order of February 27, 2014. We discussed those motions in our previous two updates for March 17 and April 1.

To summarize, Allstate filed a reconsideration motion that asked the judge to change his February 27 decision dramatically. Allstate re-argued that, supposedly, the federal standards for whether a release of federal rights is "knowing and voluntary" are identical to the state standards for whether a release was signed under duress or as a result of fraud, and that under those standards, the judge should have granted summary judgment to Allstate. Judge Buckwalter rejected every one of Allstate's arguments in denying the motion for reconsideration. He also denied Allstate's motion to provide greater clarity about what information was relevant in determining whether a release was signed knowingly and voluntarily. Finally, he also rejected Allstate's motion that he grant it summary judgment on our contentions that the Release was unconscionable.

Equally important, Judge Buckwalter granted our motion for clarification. He had stated in his February 27 opinion that your employment contracts were terminable at the will of either party by their express terms. If this ruling had applied to the merits of the case, it would have made it far harder to prove our breach-of-contract claims. At our request, he clarified that his statements were not binding on us at the merits stage, and we remained able to try to prove that Allstate breached your employment contracts when it terminated them as part of the Mass Termination Program.

We obviously are very pleased with his rulings.

Second, on April 8 we and the attorneys for Allstate met with Judge Buckwalter to discuss several matters. We had hoped to emerge with a firm date for trial on the validity of the Release. Unfortunately, the Judge concluded that too many issues remained open to schedule a trial, but indicated a desire to have a trial in late fall of this year.

At the conference Judge Buckwalter agreed that we could file a motion to certify a class to challenge the validity of the Release. At this time we will not be moving to certify a class as to the merits of plaintiffs' claims that Allstate breached your employment contracts and violated the Age Discrimination in Employment Act (ADEA) and the Employee Retirement Income Security Act (ERISA) when it terminated your employment contracts.

Although deadline dates still need to be finalized, our motion and supporting materials apparently will be due in mid-May, and the entire briefing process should be completed by the end of June. We intend to post our class certification brief after it is filed.

Orders

Opinion on Motions for Clarification and/or Reconsideration

Allstate Agents Litigation

4/7/14


April 1, 2014

As mentioned in the March 17 update, each side filed a motion for clarification or reconsideration directed at certain aspects of Judge Buckwalter's decision of February 27. Yesterday each side filed its opposition to the other side's motion for clarification or reconsideration. Click here for Plaintiffs' opposition to Allstate's motion, and click here for Allstate's opposition to our motion.

The conference with the judge to establish the dates and parameters for the trial on the validity of the Release occurs on April 8. We will update this website a day or two later with relevant information.


March 17, 2014

There were four significant developments in the case late last week.

First, as explained in the attached Opinion issued March 13, Judge Buckwalter granted Allstate's motion for summary judgment on the EEOC's claim that the requirement that agents sign the Release was illegally retaliatory, and denied the EEOC's cross-motion. Because this was the EEOC's only claim in the case, the judge ordered that final judgment be issued against the EEOC and its case closed.

The EEOC will have 60 days from March 13 to decide whether to appeal. We will inform you via this website whether it does decide to appeal.

The private plaintiffs will be proceeding with the case even if the EEOC does not appeal. We will try to prove to a jury that the Release was invalid under each of the arguments allowed under Judge Buckwalter's decision of February 27.

Second, we filed on March 13 a motion for clarification or reconsideration of one limited aspect of Judge Buckwalter's decision of February 27. We ask the Judge to clarify that he has not decided for purposes of the merits of the case whether the R830 and R1500 contracts were terminable at will.

Third, Allstate filed its own motion for reconsideration and/or clarification on March 14. It asks Judge Buckwalter to reconsider and/or clarify the legal bases of his ruling of February 27 that there are factual issues as to whether the Release was executed knowingly and voluntarily and whether the Release was unconscionable.

Finally, a status conference is scheduled for Tuesday, April 8, at 4:00 p.m. The trial dates, and presumably other issues related to a trial, presumably will be set at that conference.


March 6, 2014

Judge Buckwalter issued a detailed, over 150-page ruling concerning the validity of the Release on Thursday, February 27. As part of Allstate's reorganization in 2000, over 6,200 employee agents signed a document, the Release, that purported to waive all of their claims arising out of their employment or the termination of their employment. If the Release is valid, then Plaintiffs who signed the Release do not have viable claims against Allstate arising out of the termination of their employment; if the Release is invalid, all Plaintiffs may attempt to prove that Allstate acted illegally or in violation of its contractual or fiduciary duties when it terminated their employment contracts.

As described in previous postings, each side filed motions for summary judgment concerning the validity of the Release last year. A motion for summary judgment urges the Court to rule based on undisputed facts. Plaintiffs argued that the Release was invalid based on undisputed facts, and Allstate argued that the Release was valid based on undisputed facts.

In the most important portion of his ruling, Judge Buckwalter disagreed with both sides. He concluded that, as to most of Plaintiffs' arguments that the Release was invalid, there were disputed issues of fact. As a result, he denied both sides' motions for summary judgment. This means that there will be a trial before a jury to decide whether the Release is invalid.

Judge Buckwalter's ruling contemplates a conference with the lawyers for both sides to discuss the trial. After that conference occurs we will post information about the trial.


December 23, 2013

As explained in our most recent update, Plaintiffs filed a motion for summary judgment asking Judge Buckwalter to invalidate the Release that over 6200 employee agents signed as part of the Preparing for the Future Program, while Allstate filed a motion for summary judgment asking him to declare the Release valid. Before the judge could rule on those motions, he had to rule on three related motions that the parties filed. In three separate rulings this month, he ruled on each of these three motions.

Allstate filed a motion to strike the declarations (written statements given under penalty of perjury) of each of the Plaintiffs plus five other witnesses on behalf of the Plaintiffs. The judge denied that motion in an order of December 19. Plaintiffs filed a motion to strike the declaration of one of Allstate's witnesses. The judge similarly denied that motion in an order of December 12.

Finally, Plaintiffs filed a motion for leave to submit a surreply brief concerning one of its arguments for the invalidity of the Release, called the "part and parcel" doctrine, because Allstate did not make its arguments against the part and parcel doctrine until its reply brief, which prevented Plaintiffs from responding to those arguments. Judge Buckwalter granted that motion in an order of December 10 and therefore will consider Plaintiffs' arguments that the Release is invalid under the part and parcel doctrine

We anticipate that Judge Buckwalter's next ruling will be on the validity of the Release. We do not know when he will be ready to issue that ruling in light of the voluminous papers submitted by both parties.


August 9, 2013

The parties have now filed their opposition and reply memoranda to the motions for summary judgment filed on April 8. This concludes the scheduled briefing on the validity and applicability of the Release that all but about 19 of the roughly 6200 employee agents signed in 2000 as part of the "Preparing for the Future" Group Reorganization Program. As reported earlier, the Romero plaintiffs and the EEOC argued that the Release was invalid, while Allstate argued that the Release was valid.

We do not know when Judge Buckwalter will rule on the motions, or whether he will hold a hearing in which the lawyers can present their arguments orally. The parties together filed hundreds of pages of arguments and proposed facts, and thousands of pages of documents and deposition transcripts. It undoubtedly will take the Judge and his clerks considerable time to review all of the papers, perform any additional legal research that they deem appropriate, and write an opinion. We know that it has been over 13 years since the Program was implemented, but please be patient a little longer.

As mentioned in our prior update, our memoranda and the EEOC's memoranda discuss information that Allstate has designated as confidential. Accordingly, we have not posted the parties' memoranda on this website. But we hope to be able to convince Allstate that information that is 13 years old, or even more dated, is no longer sensitive and may be unsealed. If Allstate agrees, we will make all of the filings available. If you are interested in reading them, please check back on the website from time to time to see if they have been posted.


April 29, 2013

The parties filed their motions and initial memoranda of law on April 8 concerning the validity and applicability of the Release that all but about 19 of the roughly 6200 employee agents signed in 2000 as part of the “Preparing for the Future” Group Reorganization Program. The Romero plaintiffs and the EEOC argued that the Release was invalid, while Allstate obviously argued that the Release was valid.

The schedule approved by Judge Buckwalter calls for each party to file its response to the other's filing in 45 days (late May) and then a reply in another 45 days (mid-July). That will conclude the briefing on the validity and applicability of the Release, and the parties will wait for Judge Buckwalter to issue a decision.

Our memorandum and the EEOC's memorandum discuss information that Allstate has designated as confidential. Accordingly, we have not posted the parties' memoranda on this website. To provide an idea of the points made in the filings, however, we reproduce on the pleadings page the table of contents from each memorandum: Romero plaintiffs' memorandum, EEOC's memorandum, Allstate's memorandum in Romero cases, and Allstate's memorandum in EEOC's case.

We cannot predict when Judge Buckwalter will issue his ruling, but it is likely to take several months. The filings were voluminous. In addition to our 78 page memorandum, for example, we filed a Statement of Undisputed Facts totaling 162 pages, and exhibits, including declarations (statements under penalty of perjury) from plaintiffs, totaling over 1000 pages. Allstate's filings were likewise voluminous. This is a lot of material for the Judge and his staff to review.

Before the motions were filed, Judge Buckwalter issued rulings on the outstanding motions arising out of the discovery on the Release, which were discussed in our prior update, dated October 17, 2012. The Judge's rulings can be found on the Orders page of the website.

We realize that this litigation was filed over 11 years ago. We are moving it forward as rapidly as we can, and realize that many of the former Allstate employee agents who may benefit from a successful outcome are moving on in years. Indeed, we mourn the loss of three of the original named plaintiffs - Doug Gafner of Wisconsin, Jim Pilchak of Michigan, and Dwight English of Tennessee - who have died during the course of the litigation. We thank you for your continuing interest, and ask for even more patience as the litigation continues.

We also want to take this opportunity to thank each of the named plaintiffs, including the representatives of their three deceased comrades. Most of them have sat through two grueling depositions. They collectively have produced over one hundred thousand pages of paper and electronic documents. They have answered written questions from Allstate. They have participated in numerous telephone calls with us, their lawyers. And throughout it all, not one has dropped out of the litigation. They remain remarkably committed to obtaining justice from Allstate.


October 17, 2012

Unless Judge Buckwalter orders additional "discovery," the plaintiffs and Allstate now have completed their discovery concerning the validity of the Release.

As explained in prior entries, discovery is the process by which lawyers can obtain information from the opposing party about facts relevant to the issues in a case. During the past two years, the parties have engaged in about 40 days of depositions, produced hundreds of thousands of pages of documents or electronic images, and devoted hundreds if not thousands of pages to answering interrogatories (written questions) and responding to requests for admission. This has meant a tremendous amount of work for the plaintiffs, for Allstate, and for the lawyers on both sides. The last deposition occurred in late July.

August 13 was the deadline for both sides to file any final motions arising out of the discovery disputes that arose along the way (as reported in prior updates, plaintiffs already filed and Judge Buckwalter already had ruled on several motions contending that Allstate had violated its discovery obligations). We filed two motions.

First, we filed a motion for entry of a spoliation inference. In that motion, we claim that Allstate permitted or caused a large number of relevant documents concerning the origination and implementation of the so-called Preparing for the Future Group Reorganization Program (the "Mass Termination Program") to be destroyed, and ask the Court to impose as a sanction the inference that the documents would have favored plaintiffs' position on the validity of the Release. We contend that Allstate reasonably should have anticipated litigation arising from the Mass Termination Program no later than June 1999, that Allstate's duty to preserve documents started at that time, and that necessary preservation instructions were not given. We also identify for the Court numerous relevant activities and numerous key employees for which Allstate failed to produce documents. Allstate's response, filed about a week ago, is that it did not anticipate litigation until February 2000, that it took appropriate steps to preserve documents promptly after then, and that we cannot identify how we were prejudiced by any documents that were lost.

Next, we filed a motion for sanctions or to compel testimony from three of Allstate's witnesses. These witnesses testified under a procedural rule that required Allstate to educate the witnesses with all of the information about certain designated topics reasonably available to the company. We contend that Allstate did not adequately prepare these witnesses so that they did not know the answers to numerous questions within the scope of the designated topics. In addition, one of the witnesses was obstructionist and another often read from a script prepared by his lawyers. In the motion, we ask Judge Buckwalter to impose as a sanction that Allstate is bound by the witnesses' lack of knowledge: Allstate will be deemed not to know any more than the witnesses did when they testified they did not know. Alternatively, we ask Judge Buckwalter to order the witnesses to be redeposed at Allstate's expense, and to give us more time to complete the questioning of one of the witnesses (Barry Hutton). Not surprisingly, Allstate contends that the witnesses were adequately prepared and not obstructionist.

Briefing on the motion for sanctions is now complete, and briefing on the motion for entry of a spoliation inference will conclude next Monday, October 22.

Allstate also filed two motions for which the briefing is already complete. First, it filed a motion to compel claiming that plaintiffs violated their duties by generally limiting the production of hard copy documents in response to Allstate's requests to documents dated no later than December 31, 2002. We contend that the parties agreed to the 2002 cutoff and that, even if there was no agreement about the cutoff date (as Allstate argues), Allstate should have raised this issue long ago. In its second motion, Allstate seeks leave to amend admissions that it made earlier in the case. Previously it had admitted that it had not instructed five key witnesses, including Ed Liddy, to preserve documents by May 1, 2000; now it wants to assert that it had instructed them to preserve documents, even though it has failed to produce any responsive documents from four of the five witnesses and even though Mr. Liddy separately admitted that he was not instructed.

The case is likely to be relatively quiet until after Judge Buckwalter rules on the four motions. We will post his decisions after they are received, which we do not anticipate until late 2012 or early 2013.

The scheduling order governing this case provides that the parties will file and brief motions for partial summary judgment motion concerning the validity of the Release within 45 days after the Judge rules on the discovery motions. All but about 19 of the over 6,200 agents (and all but one of the named plaintiffs) signed the Release as part of the Mass Termination Program. The ruling on the validity of the Release thus is very important to the plaintiffs and other employee agents.


January 23, 2012

Last week, Judge Buckwalter issued Orders on both of the pending discovery motions, which were described in the update of December 12, 2011.

In one of the pending motions, we asked Judge Buckwalter to order Allstate to answer properly our requests for admission concerning its preservation of email and other electronic documents. Allstate refused to answer most of the requests on a variety of bases, two of which were primary. First, it objected to many of the requests on the ground that they related to the Mass Termination Program instead of only to the validity of the Release, the issue that is the focus of the current round of discovery. Second, it objected to our request that it address the company's efforts to preserve the documents of each custodian (the person to whose account an electronic document was stored), contending that it should have to respond only as to the custodian's efforts to preserve his or her own documents.

As you will see, the judge agreed with us completely on the first issue, stating that our document preservation requests properly related to documents concerning the entire Program, not just the Release. On the second issue, the judge reached a compromise. Allstate needs to answer as to the efforts of the IT and Legal Departments, but not necessarily all of Allstate. The judge gave Allstate 20 days in which to answer the requests for admission properly. Click here (Order on Motion to Compel) to review Judge Buckwalter's Order on the requests to admit.

In the other pending motion, Allstate asked the judge for a protective order to limit the scope of a deposition that we intend to take. Again, the principal dispute was over whether topics had to be limited to "the Release," or whether they could concern "the Program." Judge Buckwalter looked at each topic individually. On the great majority of topics, he agreed with us; on a few, he thought our topics went too far and addressed the merits rather than the validity of the Release. In a few instances, he limited the temporal scope of the topics. Click here (Order on Motion for Protective Order) to review Judge Buckwalter's Order on the deposition.

We are gratified by both of these Orders, and hope that these two rulings will cause Allstate to alter its position on other pending disputes, allowing our discovery to move forward with fewer objections.

In the meantime, Allstate is deposing our plaintiffs. We expect that the next two months will be filled with discovery from both sides concerning the validity of the Release. We will update this site again when we have additional information to share about the progress of the discovery.


December 12, 2011

For the past year, the parties have been engaged in vigorous "discovery" concerning the validity of the Release. Discovery is the process by which each side in a civil lawsuit obtains information from the other. In response to Plaintiffs' discovery, Allstate has produced thousands of pages of documents to Plaintiffs (although Plaintiffs believe the production to be grossly inadequate), answered written questions, and responded to Plaintiffs' requests for admission. Similarly, Plaintiffs have produced many thousands of pages of documents to Allstate, answered Allstate's written questions, and responded to Allstate's requests for admission.

Of course, Allstate has resisted a substantial portion of Plaintiffs' discovery. There are two motions pending before the Court concerning Plaintiffs' discovery: Plaintiffs' motion challenging the adequacy of Allstate's responses to Plaintiffs' discovery, and Allstate's motion for a protective order to limit the topics about which Plaintiffs may inquire during an upcoming deposition. Click here for the Plaintiffs' Challenging Sufficiency of Allstate's Responses. Click here for Allstate's Motion for a Protective Order. It seems unlikely that Judge Buckwalter will decide the motions until early 2012.

While the parties wait for those decisions, they will move forward with depositions. During depositions, the parties can question the opposing parties or other witnesses outside the presence of the judge. The questions and answers are transcribed by a court reporter, and can in appropriate circumstances be used as evidence in subsequent proceedings in the case. We expect the depositions to last into early 2012 as well.

The discovery process, including the resolution of the parties' disputes, is taking longer than we had anticipated when the process started. Our best estimate now is that our motion challenging the validity of the Release will not be filed until late spring of 2012.

Although this delay is frustrating to Plaintiffs, we wish to assure everyone that the Plaintiffs and their lawyers are working as hard as they can to achieve a successful result in the case as quickly as possible.


November 18, 2010

In an opinion issued last week, Judge Buckwalter denied the motion of Allstate’s former CEO Edward Liddy to be dismissed from the case. As discussed in our updates of August 27, September 14 and October 5, plaintiffs are suing Mr. Liddy for violating ERISA section 510, which prohibits any person from taking an adverse employment action against a participant in an employee benefit plan for the purpose of preventing the participant from accruing additional benefits. Mr. Liddy principally argued that the word “person” under ERISA did not include corporate officers, so that he could not be liable under that statute. Judge Buckwalter rejected that argument, and Mr. Liddy will remain in the case.


October 22, 2010

Yesterday Judge Buckwalter issued an opinion and order on plaintiffs’ motion to compel. As described in our update of September 14, 2010, several months ago we served a series of requests to produce documents, Allstate refused to produce documents in response to most of the requests, and we asked Judge Buckwalter to order Allstate to produce the documents (a “motion to compel”). As his opinion makes clear, Judge Buckwalter agreed with us on almost every issue. He ordered Allstate to produce all of the requested documents and to cooperate with us in agreeing on the parameters to be used in searching for relevant documents maintained electronically, such as emails.

Also as described in our update of September 28, Allstate has refused to answer most of our written questions, called interrogatories. In response to our motion to compel responses to those interrogatories, Allstate filed a motion to stay briefing until after a decision had been issued on the motion to compel production of documents. In a brief order, Judge Buckwalter agreed that Allstate did not need to respond to our motion to compel responses to interrogatories until after the motion to stay was decided. We are hopeful, however, that his decision on the motion to compel production of documents will lead to a resolution of the dispute over the responses to our interrogatories.


October 5, 2010

Yesterday Edward Liddy, Allstate’s former CEO, filed his reply brief in support of his motion to dismiss the claims against him. As we explained in earlier updates, some statutes and common law principles allow employees to sue only their employer (Allstate), while others also allow suits against executives who were involved in the decision-making. Age discrimination and breach of contract claims only permit claims against employers. We believe that the claims we brought against Mr. Liddy under the federal statute that protects employee benefits allow claims against corporate officers, while he argues that it does not. To make his argument, Mr. Liddy must contend that he is not a “person” within the meaning of the law, an argument that, we believe, strains credulity.


September 28, 2010

Plaintiffs yesterday filed a motion to compel answers to the interrogatories that they served on Allstate several months ago. Click here to review a copy of plaintiffs’ brief in support of their motion.

Interrogatories are written questions to be answered by a party. Here, because discovery is focused on the validity of the Release, the interrogatories were designed to obtain information relevant to the validity of the Release or to lead plaintiffs to sources of relevant information about the Release, such as the names of persons with knowledge of various issues related to the Release. Allstate answered only the first interrogatory, including its subparts, and refused to answer the other interrogatories. Primarily, it contends that there were too many interrogatories (counting the various subparts as separate interrogatories) or that the requested information was not relevant to the validity of the Release. Obviously, we disagree strongly. Allstate will have 21 days to file their opposition brief, and plaintiffs then will have 14 days to file a reply brief.

The other motions described in the August 27 and September 14 updates are still pending.


September 14, 2010

Plaintiffs yesterday filed their Opposition to Mr. Liddy’s Motion to Dismiss. As noted in our August 27 update, Mr. Liddy is arguing that he cannot be sued for acts committed while a corporate officer. As you will see from reading the brief, we believe that Judge Fullam rejected the same argument over eight years ago and that Mr. Liddy is in effect seeking reconsideration of that ruling without any proper basis. But if Judge Buckwalter does choose to reconsider the issue of whether plaintiffs have stated a claim against Mr. Liddy, we show in the brief that the language of the Employee Retirement Income Security Act (“ERISA”), the statute under which plaintiffs have brought suit, expressly allows suit against Mr. Liddy or any other “individual,” and there is no exception for corporate officers.

Also pending, and not mentioned in our earlier posts, is plaintiffs’ motion to compel Allstate to produce documents that plaintiffs have requested. Plaintiffs’ opening brief, defendants’ opposition, and plaintiffs’ reply can be read by clicking here or by opening the Pleadings page. We believe that the Court of Appeals has already indicated that we should have access to all of the requested documents, and that those documents are likely to be important for us to make the strongest possible arguments that the Release is invalid.


August 27, 2010

The Allstate defendants today filed their Answer and Affirmative Defenses to Plaintiffs’ Second Amended Complaint. In an answer, a defendant states whether it admits or denies each of the allegations in a complaint. Not surprisingly, Allstate denies most of the allegations in the Second Amended Complaint. In the affirmative defenses, a defendant identifies reasons why it contends it should prevail even if some or all of the facts alleged in a complaint are true. Plaintiffs do not have to respond to the answer, but may, if they choose, file a motion challenging some of the affirmative defenses.

At the same time, Edward Liddy filed a Motion to Dismiss. As a matter of law, an individual can be held liable for some types of actions committed as a corporate officer but not for others. Mr. Liddy contends that a corporate officer, such as a CEO, cannot be liable under the laws that form the basis of plaintiffs’ claims. We intend to file a brief opposing his arguments.

Meanwhile, the parties continue to be engaged in the discovery process concerning the validity of the Release signed by almost all employee agents in 2000. As significant developments occur in that process, we will post updates.


July 28, 2010

Judge Buckwalter today issued a decision permitting plaintiffs to file a Second Amended Complaint. To review a copy of the decision, click here.

Allstate had opposed plaintiffs' motion, arguing that plaintiffs should not be allowed to claim (a) that Allstate made a series of misrepresentation that made plaintiffs' execution of the Release not "knowing", thereby invalidating the Release, and (b) that the termination of agents' employment contracts had an adverse impact on older agents that was illegal under the Age Discrimination in Employment Act. Judge Buckwalter reasoned that the plaintiffs had adequate reasons not to have made those allegations earlier in the case and that Allstate was not prejudiced by any delay in asserting those arguments.


April 5, 2010

As directed by the United States Court of Appeals for the Third Circuit, the matters pending before Judge Fullam since 2001 were reassigned to the Honorable Ronald Buckwalter in January 2010. This includes the following cases:

Romero I, No 01-CV-3894, which challenges certain aspects of the Preparing for the Future Group Reorganization Program (Program) announced in November 1999, including (a) the validity of the General Release and Waiver Agreement (Release), (b) the termination of the R830 and R1500 contracts under which employee agents were hired and worked, and (c) Allstate's interference with pension and other employee benefits;

Romero II, No. 01-CV-6764, which challenges certain amendments to the Agents Pension Plan and alleged misrepresentations relating to eligibility for early retirement and other pension benefits; and

EEOC v. Allstate Insurance Company, No. 01-CV-7042, which challenges the validity of the Release under the Age Discrimination in Employment Act (ADEA), the Civil Rights Act of 1964 (Title VII), and the Americans with Disabilities Act (ADA).

Judge Buckwalter is an experienced jurist who has sat on the District Court for two decades.

At the Court's request, the attorneys for the respective parties met for a status conference on February 14, 2010, at which time Judge Buckwalter made clear that he would follow the mandate of the Court of Appeals and limit "merits" discovery to issues relating to the validity of the Release executed by nearly all of the 6,200 employee agents whose employment contracts were terminated as part of the Program. The parties subsequently were able to negotiate a proposed form of case management protocol under which certain issues relating to the validity and applicability of the Release can be decided by the Court. This will be presented to Judge Buckwalter so that it can be entered as an order of the Court. Plaintiffs already have provided Allstate with a copy of the discovery requests that will be served upon entry of the order.

We are pleased Judge Buckwalter has indicated a willingness to meet with the parties as frequently as necessary to ensure that progress can be made in these long-delayed cases.

We will continue to update this website as developments occur.


July 29, 2009

On July 29, 2009, the United States Court of Appeals for the Third Circuit issued a per curium (unanimous) opinion in which it vacated Judge Fullam's ruling of June 20, 2007, by which he had dismissed all of the claims that had been asserted in the Romero and EEOC cases, and directed that, upon remand to the trial court, the case be reassigned. While the Third Circuit's opinion did not resolve many legal issues that were before it on appeal, including the merits of the ADEA, ERISA, and breach of contract claims the Romero plaintiffs have brought against former Allstate CEO Edward Liddy, The Allstate Corporation, and Allstate Insurance Company or the retaliation claims the EEOC has brought against Allstate Insurance Company, it found that the Romero plaintiffs are, at minimum, entitled to discovery concerning the validity of the General Release and Waiver Agreement that all but a handful of the 6,200 terminated employee agents were required to execute. The Third Circuit noted in this regard that if the newly-assigned district court judge determines that the Release is not valid, the trial court will need to address all of the claims that have been raised by the Romero plaintiffs, including the breach of contract and breach of fiduciary duty claims, as well as the "cutback" and misrepresentation claims asserted in Romero II.

The Court of Appeals additionally remanded the age discrimination and ERISA benefit claims asserted in Romero I so that the district court can determine whether plaintiffs were provided with sufficient discovery relating to those claims.

Finally, with respect to the Romero II claims, the Court of Appeals agreed with the Romero plaintiffs that the Scott and Swain decisions are not dispositive and those claims can move forward in the district court.

The Romero plaintiffs are pleased that the Third Circuit has vacated the case for further proceedings and look forward to arguing the merits of each of their claims to a new trial judge after being afforded the discovery to which they are entitled.


March 23, 2009

The parties appeared today before the United States Court of Appeals for the Third Circuit in Philadelphia to argue issues relating to Judge Fullam's ruling that dismissed the Romero I, Romero II, and EEOC lawsuits in June 2007. The Romero plaintiffs appreciate that they were afforded the opportunity to appear before the Court, and are encouraged that each of the three judges sitting on the panel had devoted substantial time familiarizing themselves with the facts of the case. No ruling is expected for at least several months. In the meantime. however, a transcript of the argument will be posted here by April 10, 2009.


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.


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.


January 6, 2006

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.


April 12, 2005

The proposed national class action lawsuit brought by 29 plaintiffs, known as Romero I, seeks to recover 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.

On March 30, 2005, the United States Supreme Court issued its ruling in Smith v. City of Jackson, Miss., - U.S. -, 125 S.Ct. 1536 (2005), which confirms that claims based on a facially-neutral employment policy or practice that applies to all employees, regardless of age, are cognizable under the ADEA if the policy or practice has a "disparate impact" on older workers. Plaintiffs therefore have asked Judge Fullam to reconsider the "tender back" requirement in light of the fact that the Supreme Court now has made clear not only that they have asserted viable claims under the ADEA, but also that no "tender back" requirement can be imposed with regard to their claims for age discrimination. Plaintiffs believe that the Court should certify a collective action for the ADEA for the reasons set forth in their motion for class certification and also have renewed their request that an "opt out" class be certified with respect to the ERISA and common law claims that they have brought.


October 8, 2004

As reported this morning by The New York Times, the United States Equal Employment Opportunity Commission has filed a second lawsuit against Allstate Insurance Company alleging that actions the company took in connection with the "Preparing for the Future" Group Reorganization Program violate the Age Discrimination in Employment Act of 1967 ("ADEA"). This lawsuit, filed in federal district court in St. Louis, Missouri, alleges that Allstate unlawfully discriminated against its employee agents, more than 90 percent of whom were over the age of 40, by refusing to rehire them to fill other positions at the company.

Based on its own investigation of Allstate's actions, which had revealed that approximately 84 percent of the individuals Allstate hired to fill positions at newly-created regional "call centers" were under the age of 40, the EEOC determined in August 2003 that the companywide "rehiring moratorium" 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."

The EEOC lawsuit follows a March 2004 ruling in which a federal district court held that the release which Allstate forced its employee agents to sign as part of the "Preparing for the Future" Program constituted unlawful retaliation and otherwise violated the ADEA and two other federal anti-discrimination statutes. The Romero plaintiffs and EEOC have filed motions asking the court to reconsider certain aspects of this ruling, including requiring agents to "repay" certain benefits allegedly received from Allstate after signing the unlawful release. There has been no ruling on the pending motions.


April 14, 2004

On April 14, 2004, the Romero plaintiffs filed a motion asking U.S. District Judge John P. Fullam to reconsider a portion of his landmark March 30 ruling. The plaintiffs are asking the Court to eliminate the requirement that former employee agents repay certain "benefits" in order to participate in the lawsuit. The EEOC also has filed its own motion asking Judge Fullam to clarify that there is no "tender back" requirement applicable to the federal government's efforts to recover punitive damages and other monetary relief under the anti-retaliation provisions of the ADEA Title VII and Americans with Disabilities Act. The EEOC also has asked the Court for a status conference to set a discovery schedule on damages issues.

As has been widely-reported, Judge Fullam ruled the General Release and Waiver Agreement that Allstate forced more than 6,200 employee agents to sign as part of the "Preparing for the Future" Program violated federal law. In agreeing with the EEOC, Judge Fullam also ruled that it is illegal to retaliate, or threaten to retaliate, against an employee to prevent the exercise of federally-protected rights. The Court then went on to find that the Release was voidable, but not void, and ordered that any former employee agent who desires to invalidate the Release first must provide written notice to Allstate and then "tender to Allstate . . . repayment of any and all benefits received in exchange for the release." Plaintiffs are hopeful that Judge