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Allstate response to agents’ lawsuit: Comply with rules or leave – Crain’s Chicago Business

Allstate has a response in court to agents who’ve sued over what they say is the company’s heavy-handedness toward them: Suck it up.

The Northbrook-based insurance giant took a dismissive tone in a Sept. 17 response to the National Association of Professional Allstate Agents’ request in Cook County Circuit Court for a temporary injunction reversing the company’s requirement that agents use its own phone service, rather than contracting for such services on their own, as they’ve done for decades. (Read the filing below.)

Judge Iris Y. Martinez is scheduled to hear arguments Oct. 19, according to the association.

“It is entirely possible that some NAPAA members will choose not to adopt (the phone system),” Allstate said in its filing. “In doing so, they will be making a choice that they no longer wish to be affiliated with Allstate. Such self-inflicted injuries are insufficient to establish the type of irreparable harm required for a court to issue an injunction.”

It’s not known exactly how many of Allstate’s approximately 10,000 agents are NAPAA members, but it’s believed to be well over 1,000.

The agents’ suit, originally filed in May in federal court but then moved to Illinois court, alleged multiple breaches of contract by Allstate. Allstate agents aren’t employees; they technically are independent contractors who contract with Allstate to sell only Allstate products and those approved by the company.

In recent years, relations between Northbrook and agents across the country have been strained, thanks to a number of actions Allstate has taken to reduce its costs tied to maintaining the large sales force. Those include reducing commissions for retaining existing policyholders—the bulk of agents’ incomes over many decades—and other changes that agents say reduces the value of their businesses and constrains to whom they can sell if they opt to leave Allstate.

Allstate CEO Tom Wilson has said he wants agents to focus more on finding new customers and leave the servicing of existing ones to company employees who work in call centers or at home. The company recently told its workforce it’s putting the sprawling Northbrook headquarters campus up for sale as it opts to make permanent the work-from-home arrangements many employees have adopted.

The centralized phone system is but one of the agents’ issues of contention, but NAPAA has seized on it as a tangible item a court can determine is a violation of the contract.

“Allstate—not its (agents)—owns the phone numbers through which (agents) conduct Allstate business and are responsible for paying expenses associated with telephone used in the agency,” Allstate’s filing stated. “Furthermore, Allstate has the right to establish technology requirements for safeguarding its customers’ data, protecting its reputation, and ensuring a consistent experience for its customers. The (phone) program falls neatly within these provisions.”

The company argues that complying with federal rules prohibiting contact of consumers who sign up on do-not-call lists, as well as protecting against hackers, are among the essential reasons for taking over agents’ phone systems.

The agents have enlisted prominent attorney James Bopp Jr., known for taking on conservative causes, to represent them. Bopp is best known for winning the controversial Citizens United case before the U.S. Supreme Court; the ruling sharply limited federal controls on political donations.

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