In response to how Allstate Insurance Co. handled its employee-agents during its reorganization in 1999 and 2000-and to prevent other employers from repeating that action-the Employee Benefits Protection Act of 2003 was introduced in Congress in March.The Northbrook, Ill.-based carrier reorganized the company to reduce expenses by $600 million annually, to bring its agents under one program, and to integrate its agency force, direct response call centers, and the Internet. As part of that plan, Allstate terminated 6,400 employee-agents in June 2000, and offered them the option to convert to independent contractor status.
Allstate's termination of the employee-agents was a business decision intended to be beneficial to both the agents and the company, says Mike Trevino, an Allstate spokesperson. "Critics would argue that the company should not change." But "our contention is that our obligation is to continue to change the business . . . so we can reflect changes in customer habits, customer preferences, the business environment and technologies."
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