Argued January 14, 2015
On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No.2-01-cv-07042) District Judge: Honorable Ronald L. Buckwalter
Paul D. Ramshaw [Argued] Equal Employment Opportunity Commission, C. Felix Miller Equal Employment Opportunity Commission, Iris A. Santiago-Flores Equal Employment Opportunity Commission, Attorneys for Plaintiff-Appellant
Donald R. Livingston [Argued] Akin, Gump, Strauss, Hauer & Feld, Katherine M. Katchen Akin, Gump, Strauss, Hauer & Feld, Richard C. Godfrey, Jordan M. Heinz, Sallie G. Smylie, Kirkland & Ellis, Erica Zolner Kirkland & Ellis, Attorneys for Defendant-Appellee
Rae T. Vann Norris, Tysse, Lampley & Lakis, Attorney for Amici Curiae in Support of Defendant-Appellee
Before: HARDIMAN, SCIRICA and BARRY, Circuit Judges.
HARDIMAN, Circuit Judge.
This appeal comes to us following a summary judgment entered by the United States District Court for the Eastern District of Pennsylvania in favor of Allstate Insurance Company. In 1999, Allstate decided to reorganize its business and terminate the at-will employment contracts of some 6, 200 sales agents, offering them the opportunity to work as independent contractors. As a condition of becoming independent contractors, agents were required to sign a release waiving existing legal claims against Allstate. The Equal Employment Opportunity Commission sued Allstate, claiming that the company violated federal antiretaliation laws. The District Court disagreed and the EEOC appealed. We will affirm.
As the District Court rightly noted, the history of this case is "lengthy and convoluted." Romero v. Allstate Ins. Co., 1 F.Supp. 3d 319, 332 (E.D. Pa. 2014). We won't repeat that history in full because it is so thoroughly explained in Judge Buckwalter's tour de force in Romero and in his opinion now under review. See Romero v. Allstate Ins. Co. (EEOC), 3 F.Supp. 3d 313 (E.D. Pa. 2014). Instead, we shall summarize the facts relevant to this appeal.
Over the past thirty years, Allstate has changed the way it sells insurance. In the early 1980s, agents worked out of Sears stores or company-owned offices under an employment contract designated R830. Allstate introduced the Neighborhood Office Agent Program in 1984, purportedly because it faced "flat productivity and the aggressive use of local independent contractor sales agents by its competitors." Allstate Br. 7. New agents hired pursuant to the Neighborhood Program signed a contract designated R1500, while existing agents had the choice of transferring to that contract or continuing their employment under the R830 contract. The Neighborhood Program allowed agents to secure their own office space, manage their own expenses, and invest money in their agencies; it did not give them transferable interests in their accounts, however, which remained the property of Allstate. Under both the R830 and R1500 contracts, Allstate agents were at-will employees and were not entitled to any severance pay in the event that they were "terminated under the terms of any group reorganization/restructuring benefit plan or program[.]" Romero, 1 F.Supp. 3d at 336, 397–98.
In 1990, the company introduced a third business model, the Exclusive Agency Program, pursuant to which all new Allstate agents worked as independent contractors under a contract called R3001. In that capacity, Allstate agents had transferable property interests in their books of business and earned higher commissions than the R830 and R1500 employee agents, but they were neither reimbursed for office expenses nor provided employee benefits. Existing employees had the opportunity to apply to convert to independent contractor status as part of the Exclusive Agency Program, but they received no conversion bonus and had to repay any outstanding office expenses advanced by Allstate. They did, however, gain property rights in the accounts they serviced as employee agents, which became transferable after five years.
According to Allstate, the Exclusive Agency Program emerged as the company's most productive business model. Meanwhile, a settlement between Allstate and the Internal Revenue Service required Allstate to more closely supervise the operations of its Neighborhood Program agents in order to preserve their status as employees for tax purposes. Concerned about the inefficiency of running several different agency programs, Allstate decided to shift completely to the independent contractor model and abandon the R830 and R1500 programs. Accordingly, in November 1999, the company ...