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Romero v. Allstate Insurance Co.

United States District Court, Eastern District of Pennsylvania

March 14, 2014

GENE R. ROMERO, et al., Plaintiffs,



Currently pending before the Court are the Cross-motions for Summary Judgment by Plaintiff Equal Employment Opportunity Commission (“EEOC”) and Defendants Allstate Insurance Company, et al. (collectively “Allstate” or “Defendant”) on the EEOC’s Complaint. For the following reasons, Allstate’s Motion is granted and the EEOC’s Motion is denied.


The factual and procedural background of this case is a lengthy and convoluted one, commencing in 1999 and continuing to the present day. The underlying facts are well known to the parties and were summarized in great detail in the Court’s Memorandum Opinion dated February 27, 2014. In lieu of rehashing this complicated history, the Court incorporates by reference the recitation of facts set forth in the previous Memorandum. Romero v. Allstate Ins. Co., F.Supp.2d, 2014 WL 796005, at *1–27 (E.D. Pa. Feb. 27, 2014).

With that caveat aside, the present Motions nonetheless require a brief review of the core facts giving rise to this matter.[1] This case revolves around Allstate’s announcement and implementation of its Preparing for the Future Group Reorganization Program (“the Program”). Prior to November 1999, the majority of Allstate’s captive agency force acted as employee agents under either an R830 or an R1500 contract and were entitled to a wide range of company-sponsored health, welfare, and retirement benefits. On November 10, 1999, Allstate announced the Program by noting that, as part of a new business model, it was reorganizing its entire captive agency force into a single exclusive agency independent contractor program. With few exceptions, Allstate terminated the employment contracts of the 6, 200-plus R830 and R1500 employee agents effective no later than June 30, 2000. While the Program applied to all agents regardless of age, productivity, or performance, approximately ninety percent of the R830/R1500 agents were over forty years of age.

In connection with the termination of the R830 and R1500 employment contracts, Allstate offered the agents working under those contracts four options. The first three options were conditioned upon the agents’ agreement to execute a release of claims, while the fourth option did not. The first “release-based” option was the “EA Option.” According to the Program Information Booklet, this option would allow the agent to enter into an R3001C or R3001S Agreement, thereby converting the agent from an employee to an Exclusive Agent (“EA”) independent contractor. The agent would then be entitled to all of the benefits and requirements of that contract, including increased renewal commissions, a conversion bonus, earlier transferability in the agent’s book of business, debt forgiveness, and reimbursement for moving expenses if necessary. The R3001 contract, however, did not entitle agents to the same employee benefits.

The second option was the “Sale Option.” This option also permitted an agent to enter into an R3001C/S Agreement with Allstate, thus converting the agent to an EA independent contractor. In turn, the agent would receive a “conversion bonus” and Allstate would forgive any advances owed, assume certain lease and advertising obligations the agent incurred as an employee agent, and permit the agent, after thirty days’ service as an EA, to sell his or her book of business written while an R830 or R1500 agent. This option also required the agent to sign a release.

The third option was the “Enhanced Severance Option.” Under this option, Allstate would pay the agent “enhanced” severance equal to one year’s pay based on the greater of 1997 or 1998 total compensation, forgive debt and/or expenses that Allstate had advanced to the agent, and relieve the agent of certain lease and advertising obligations incurred as an R830 or R1500 agent. This option was unavailable unless the agent signed a release.

The final option was the “Base Severance Option.” If an agent elected this option, then Allstate paid him or her up to thirteen weeks of pay. The agent electing this option did not need to enter into a release, although he/she was subject to certain additional non-compete and non-solicitation obligations. Notably, Allstate had determined that agents affected by the Program were ineligible for the pre-existing severance or post-termination pay plans because they were not terminated for any of the reasons set forth in those plans. Allstate also took the position that the pre-existing severance/post-termination pay plans were inapplicable because they did not apply to group reorganization programs.

The Release required by the first three options was three pages long, including a signature page.

The Release and Waiver Provision stated:

In return for the consideration that I am receiving under the Program, I hereby release, waive, and forever discharge Allstate Insurance Company, its agents, parent, subsidiaries, affiliates, employees, officers, shareholders, successors, assigns, benefits plans, plan administrators, representatives, trustees and plan agents (“Allstate”), from any and all liability, actions, charges, causes of action, demands, damages, entitlements or claims for relief or remuneration of any kind whatsoever, whether known or unknown, or whether previously asserted or unasserted, stated or unstated, arising out of, connected with, or related to, my employment and/or the termination of my employment and my R830 or R1500 Agent Agreement with Allstate, or my transition to independent contractor status, including, but not limited to, all matters in law, in equity, in contract, or in tort, or pursuant to statute, including any claim for age or other types of discrimination prohibited under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Employee Retirement Income Security Act (“ERISA”), the Illinois Human Rights Act, and the West Virginia Human Rights Act as those acts have been amended, or any other federal, state, or local law or ordinance or the common law. I further agree that if any claim is made in my behalf with respect to any matter released and waived above, I hereby waive any rights I may have with respect thereto and agree not to take any payments or other benefits from such claim. I understand that this release and waiver does not apply to any future claims that may arise after I sign this Release or to any benefits to which I am entitled in accordance with any Allstate plan subject to ERISA by virtue of my employment with Allstate prior to my employment termination date.

(Allstate’s Mot. Summ. J. on the Validity of the Release, Heinz Decl., Nos. Civ.A.01-3894, 01-6764, Ex. 186 (“Release”), at ARI 004101.)

Several employee agents subject to this Program brought age discrimination charges against Allstate with the Equal Employment Opportunity Commission (“EEOC”) and subsequently initiated two federal cases against Allstate: Romero v. Allstate, No. Civ.A. 01-3895 (“Romero I”) and Romero v. Allstate, No. Civ.A.01-6746 (“Romero II”). Shortly thereafter, the EEOC brought its own action against Allstate, on December 27, 2001, alleging that Allstate unlawfully retaliated against all employee agents, in violation of the ADEA and other federal employment statutes, by refusing to permit them to continue as Allstate employees unless they signed the Release. Via this action, the EEOC sought a declaratory judgment that the Release is invalid. (Am. Compl., No. Civ.A.01-7042 (“EEOC v. Allstate”).)

In compliance with the Court’s scheduling order in the consolidated actions, the parties began filing summary judgment motions in early April 2013. Briefing on those motions and related motions did not conclude until the end of August 2013. As of December 2013, this Court had ruled on all of the evidentiary disputes associated with the summary judgment motions, leaving the latter motions ripe for judicial review. On February 27, 2014, the Court issued a Memorandum and Order on the Cross-Motions for Summary Judgment as to the Validity of the Release signed by the Plaintiffs in Romero I and Romero II and determined that genuine issues of material fact remained as to whether the Release was knowingly and voluntarily signed. Romero, F.Supp.2d, 2014 WL 796005, at *68–79.

Now pending are the EEOC’s and Allstate’s Cross-Motions for Summary Judgment as to the EEOC’s Amended Complaint. These Motions are ripe for judicial review.


Summary judgment is proper “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2). A factual dispute is “material” only if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For an issue to be “genuine, ” a reasonable fact-finder must be able to return a verdict in favor of the non-moving party. Id.

On summary judgment, the moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145–46 (3d Cir. 2004). It is not the court’s role to weigh the disputed evidence and decide which is more probative, or to make credibility determinations. Boyle v. Cnty. of Allegheny, 139 F.3d 386, 393 (3d Cir. 1998) (citing Petruzzi’s IGA Supermkts., Inc. v. Darling-Del. Co. Inc., 998 F.2d 1224, 1230 (3d Cir. 1993)). Rather, the court must consider the evidence, and all reasonable inferences which may be drawn from it, in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir. 1987).

Although the moving party must establish an absence of a genuine issue of material fact, it need not “support its motion with affidavits or other similar materials negating the opponent’s claim.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). It can meet its burden by “pointing out . . . that there is an absence of evidence to support the nonmoving party’s claims.” Id. at 325. If the non-moving party “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden at trial, ” summary judgment is appropriate. Celotex, 477 U.S. at 322. Moreover, the mere existence of some evidence in support of the non-movant will not be adequate to support a denial of a motion for summary judgment; there must be enough evidence to enable a jury to reasonably find for the non-movant on that issue. Anderson, 477 U.S. at 249–50.

Notably, these summary judgment rules do not apply any differently where there are cross-motions pending. Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008). As stated by the Third Circuit, “‘[c]ross-motions are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist.’” Id. (quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968)).


In its Motion for Summary Judgment, the EEOC asserts that (1) the Release requirement that was part of the Program constituted unlawful retaliation in violation of multiple anti-retaliation statutes and (2) section 503(b) of the Americans With Disabilities Act invalidates Allstate’s “sign the release or leave” scheme. Allstate rests its Cross-motion on the proposition that the Release does not substantively violate any federal statute, thereby warranting summary judgment in its favor on the entirety of the EEOC’s Complaint. The Court addresses each argument separately.

A. Retaliation Claim

The EEOC frames its first argument in terms of a singular issue: “Did Allstate’s replacement of its employee agents’ right to seek to convert to the R3001 contract with the requirement that they release all of their rights under the employment discrimination laws in order to be allowed to convert, dissuade employee agents from freely pursuing their claims?” (EEOC’s Mem. Supp. Mot. Summ. J. 16.) More precisely, the EEOC contends that the Release-signing requirement imposed by Allstate as part of the Program constituted unlawful retaliation under section 704(a) of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq. (“Title VII”), [2] section 4(d) of the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), [3] and section 503 of the Americans With Disabilities Act, 42 U.S.C. § 12101, et seq. (“ADA”).[4]

The United States Supreme Court has interpreted these retaliation provisions to have a broad reach.[5] In Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53 (2006), the Supreme Court held that “Title VII’s substantive provision and its antiretaliation provision are not coterminous. The scope of the antiretaliation provision extends beyond workplace-related or employment-related retaliatory acts and harm.” Id. at 67. It reaffirmed that “[t]he antiretaliation provision seeks to prevent employer interference with ‘unfettered access’ to Title VII’s remedial mechanisms. . . . It does so by prohibiting employer actions ...

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