Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
July 7 — Allstate Insurance Co. partially convinced a judge in Pennsylvania to dismiss some ERISA claims of retaliation and interference with protected rights brought by former and current agents who allegedly were improperly classified as independent contractors ( Romero v. Allstate Ins. Co. , 2016 BL 216891, E.D. Pa., No. 2:01-cv-03894-MAK, 7/6/16 ).
In granting in part Allstate's motion to dismiss, Judge Mark A. Kearney held July 6 that some of the agents' claims under the Employee Retirement Income Security Act were time-barred. However, Kearney declined to dismiss the agents' state-law claims, as well as certain retaliation, interference with benefits and fiduciary breach claims under ERISA.
This long-litigated case stems from Allstate's 1999 effort to reorganize its business model by changing its insurance agents from employees to independent contractors. At the time, Allstate offered employment contracts to certain agents conditioned on their agreement to sign claims releases.
In the wake of those changes, the agents filed multiple lawsuits challenging Allstate's conduct. Earlier this year, the court consolidated eight other actions, assigning Romero v. Allstate Insurance as the lead case. Then, the agents filed a consolidated complaint addressing their state-law and federal claims. Allstate moved to dismiss.
As to the agents' ERISA claim of interference with protected rights, the court extensively cited a previous decision by Judge Ronald L. Buckwalter in one of the related cases, which held that the agents' claims weren't time-barred.
The court rejected Allstate's argument that Buckwalter erred by applying equitable tolling to the agents' claims. In doing so, the court said that extraordinary circumstances created by the unusual procedural posture impeded the calculation of the running of the statute of limitations and warrant the application of equitable tolling.
Using this same reasoning, the court dismissed the claims of some agents because they were untimely despite having received notice that failure to file their lawsuit within the limitations period would bar their claims.
The court also dismissed the claims brought by some agents alleging that Allstate retaliated against them under ERISA and the Age Discrimination in Employment Act. These claims were based on arguments presented by the Equal Employment Opportunity Commission that had been already dismissed in summary judgment, the court said.
Finally, the court didn't dismiss the retaliation claims based on Allstate's counterclaims. The court said that the agents stated a valid claim by alleging that they engaged in protected activity by filing EEOC charges and a lawsuit. In support of their claim, they also alleged that Allstate took adverse action by filing a counterclaim in a bad faith effort to threaten the agents with harassing litigation to dissuade them from pursuing their claims, the court said.
Noting the complexity of the state-law claims, which involve "nuances" of approximately 40 different states' laws, the court declined to dismiss them.
According to court documents, the case is set for trial later this year to resolve the ERISA and ADEA claims.
Morgan Lewis & Bockius LLP, Sprenger & Lang and Lauletta Birnbaum LLC represented the agents. Dentons US LLP, Akin Gump Strauss Hauer & Feld LLP and Kirkland & Ellis represented Allstate.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
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