CHICAGO, Illinois - On Tuesday the National Association of Professional Allstate Agents, Inc. (“NAPAA”) and several former Allstate agents filed a lawsuit against Allstate Insurance Company in the United States District Court for the Northern District of Illinois, Eastern Division. The lawsuit alleges that the insurance giant breached its contract with its NAPAA member agents and the individual agents in several significant ways.
Exclusive agents with Allstate have the ability to build a “book of business” that can be sold at a future date. Many Allstate agents view the future ability to sell their book of business as a key component to their retirement nest egg. The Allstate agency contract gives Allstate broad power to deny or approve of such a sale, but requires Allstate to consider such sales. Many times, a current Allstate agent is interested in purchasing an existing book of business. These agents are often objectively qualified to buy a book of business, but Allstate has told many agents that it will not even consider a current Allstate agent for a purchase. NAPAA asserts that this “blanket policy” of refusing to consider current Allstate agents has harmed its member agents and is a breach of contract.
Allstate publicized that it will only authorize “independent agents” (agents who can also sell non- Allstate policies) to sell in areas not served by its “exclusive agents” (agents who can only sell Allstate policies). However, Allstate has authorized many independent agents to sell in areas that are currently being served by exclusive agents. NAPAA asserts that this practice has harmed its member agents and is a breach of contract.
NAPAA also alleges Allstate has harmed its members and breached the contract by “poaching” policies from agents after hours and on weekends via Allstate’s corporate phone and internet portals. Allstate then later “assigns” these poached policies back to the agent for a significantly reduced commission. In addition, Allstate has recently introduced a new phone system it is requiring agents to use. This requirement breaches the agents’ contract because the terms of the contract specify the agents are to supply and maintain their own phone system.
Several former Allstate exclusive agents joined NAPAA in this suit. These agents were top producers for Allstate. In some cases, Allstate interfered with the agent’s negotiations to sell his book of business, in direct breach of contract. In other cases, Allstate acted in bad faith by interfering in negotiations by trying to direct the sale of an agency to benefit someone who was a personal friend. In still other cases, Allstate unjustly terminated agents’ business “for cause.”
“Allstate’s brutal tactics fly in the face of what it promotes to potential agents,” said James Bopp, Jr., who serves as lead counsel in the lawsuit. “Contracts are supposed to represent the interests and intentions of both parties. By wielding outsize control over its contract and then not following the provisions it included, Allstate has breached this contract and hurt people’s livelihoods in serious ways.”
The complaint is available on The Bopp Law Firm, PC’s website.
13 replies (most recent on top)
Allstate‘s Sales Leaders are also advising incorrect (deliberately, perhaps?) deadlines to a terminated agent who is selling and the purchasing agent in terms of how long the purchasing agent has until to submit the necessary documents in order to solidify the sale. Former agent myself. This is what happened to my son.
cuéntame más, amigo
Take your EA BS elsewhere, loser!
The lawsuit is correct in its assessment that Allstate is manipulating the price of Agencies. This is NOT an ethical practice that management is doing. Agents were borrowing large amounts of cash from lending institutions to buy agencies under a contractual agreement with Allstate.
No surprise. Allstate sales leaders and management is corrupt as they come.
This is all true. I honestly think this will go somewhere. This lawsuit was filed very carefully with a significant amount of evidence.
Get them to look into the bad faith claims handling going on too.
The company physically does not have enough adjusters to be able to handle claims in good faith
While they’re at it, look into the practices of a few select leaders of departments involved in the 2020 layoffs. Get the media on it. Company is unethical all the way around.
The things in the lawsuit are allegations until proven in court (unless you have unquestionable proof of the allegations), and based on the track history of frivolous lawsuits against large companies, I take every new one, especially from an organization like NAPAA, with a grain of salt
Whether or not this lawsuit "stick" is yet to be seen; it may or may not. However, the fact that everything in this lawsuit is TRUE, make this a despicable vile company. Who or what company takes pride in "ANOTHER LAWSUIT that is never going to see the light of day...but keep trying...". Most HONEST people/company try to not have ANY lawsuits. But no, this company (or maybe a representative of this company) seem to take pride in ANOTHER LAWSUIT! This company not only authorized many independent agents to sell in areas that are currently served by exclusive agents, this company authorized some independent agents to sell in the same building as exclusive agents. WOW...this company...smh!
Ok mercer
Another lawsuit that is never going to see the light of day... but keep trying, maybe something will stick.
Tl:DNR; so, cool story bro