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A release that 6,200 sales agents for Allstate Insurance Co. were required to sign in order to keep their jobs is voidable because it prohibited the agents from filing complaints with the Equal Employment Opportunity Commission, a federal judge has ruled. If a sufficiently large number of agents and former agents decide to rescind the releases because they are voidable, the group may apply for class certification when the definition of the proposed class is clarified, U.S. District Court Senior Judge John P. Fullam concluded. The releases, issued in 1999, gave agents the option of changing their employment status to “independent contractor” (as opposed to “employee-agent”) or losing their jobs at the end of June 2000, according to the judge’s opinion. The releases also barred the agents from bringing claims against the company under the Age Discrimination in Employment Act, the Americans with Disabilities Act and Title VII of the Civil Rights Act, which prohibits sexual harassment, according to the opinion. Fullam’s opinion in Romero v. Allstate Insurance Co. consolidated three cases challenging the releases. One case, Romero I, proposed a class that sought to represent the 6,200 former employee-agents, bringing claims for breach of contract and violations of the ADA, ADEA, Title VII and the Employee Retirement Income Security Act, according to the opinion. But Fullam said the would-be class includes agents who refused to sign the release, agents who did sign it and went on to work as Allstate independent contractors, and agents who sold their blocks of business to other agents and resigned, among others. He certified part of the proposed class — one comprising the 16 former agents who refused to sign the releases and were consequently let go with little or no severance pay in June 2000. Allstate had moved for dismissal of the claims brought by the former employee-agents who had signed the releases, arguing that it had not intended to preclude the filing of charges with the EEOC and pointing out that more than 300 employee-agents had in fact filed charges. But Fullam said that there is no way of knowing how many employee-agents did not file complaints with the EEOC because they accepted the language of release at face value. Moreover, “it is illegal to either retaliate, or threaten to retaliate, against an employee to prevent him from exercising rights under the EEOC, Title VII, ADEA, ADA, etc.,” Fullam wrote. “Those employees who did not sign releases were in fact treated less favorably than those who did sign, and the signers had all been threatened with such an outcome if they exercised their right to refuse to sign the proposed release.” The releases also violate the Older Workers’ Benefit Protection Act, which says that waiver agreements cannot include provisions prohibiting individuals from filing a complaint with the EEOC — including challenges to the validity of the waiver. So Fullam issued a declaratory judgment that makes the releases effectively voidable at the option of each class member — enabling those would-be members who wish to sue Allstate to sue without harming those who don’t want to sue. Another case, called Romero II, proposed a class of former employee-agents whose ERISA rights were allegedly violated when Allstate made changes to their pension plan between 1991 and 1996 making it more difficult to qualify for early retirement benefits. This claim was filed after the statute of limitations ran out, Fullam found. As for the plaintiffs’ allegation that their change in status to independent contractors caused them to lose pension entitlements, this claim is addressed in Romero I and a third case, which was brought against Allstate by the EEOC. For these reasons, Fullam refused to certify the proposed Romero II class and dismissed the case entirely. Allstate had brought a counterclaim against the former employee-agents who signed the releases because they had sued the company contrary to what they’d promised not to do in the releases, according to the opinion. But because the releases are voidable, Fullam granted the plaintiffs’ motion to dismiss the counterclaim. Fullam also dismissed the plaintiffs’ age discrimination claims, finding that age was a factor irrelevant to the plaintiffs’ allegations. Edward F. Mannino of Akin Gump Strauss Haner & Feld and Richard C. Godfrey of Kirkland & Ellis in Chicago argued the motions for Allstate. The attorneys did not return calls for comment yesterday. Michael D. Lieder of Spenger & Lang in Washington was an attorney who argued the motions for the plaintiffs. He did not return calls for comment yesterday. Bruce V. Griffiths is listed in court records as counsel for the EEOC.

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