Opinion ID: 789886
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 For many years Allstate typically hired, as employees, the agents who sold its policies and handled its claims. These employee agents operated under one of two types of employment contracts known as R830 and R1500. At some point, Allstate determined it would be better served by agents operating as independent contractors, and thereafter, all newly hired agents were independent contractors providing services to Allstate under a contract known as R3001. Beginning in the early 1990's, Allstate also set out to persuade current employee agents to convert to independent contractor status. 3 Allstate maintained a Pension Plan subject to ERISA. Prior to 1991, full-time employee agents became participants in the Pension Plan after one year of service and were fully vested after five years. The pre-1991 version of the Pension Plan contained an attractive early retirement feature under which agents with at least 20 years of continuous credited service could opt to retire at age 55 and receive an enhanced early retirement benefit which assumed the retiree had continued to work until age 63. That version of the Pension Plan provided that [a]ll service with Allstate shall count as `Credited Service' for purposes of accruing retirement benefits, including the enhanced early retirement benefit. 4 In November 1991, Allstate amended the Pension Plan (retroactive to January 1, 1989) to phase out the enhanced early retirement benefit over a period of eight years (Phase-Out Amendment). 1 The Phase-Out Amendment was re-adopted in December 1994. Plaintiffs contend that at this time, however, they could not have been affected by the Phase-Out Amendment because they had not yet reached 55 years of age and completed 20 years of credited service. 5 Also in December 1994, the Pension Plan was amended to alter the definition of credited service. The new definition provided that only an Agent's employment [by Allstate] as an employee shall count as `Credited Service' (Credited Service Amendment). A new appendix added to the written Pension Plan explained that agents who entered into an agreement to provide substantially similar services to Allstate as independent contractors under an R3001 contract would be denied early retirement. Thus, newly hired agents and former employee agents who had converted to the R3001 contract would no longer have their service to Allstate count for purposes of early retirement. In January 1996, Allstate amended the Pension Plan again, this time adding a new provision to make employee a defined term, and to exclude therefrom any person providing services to Allstate under an R3001 contract (Employee Definition Amendment). 6 As the decade advanced, Allstate stepped up it efforts to persuade remaining employee agents to convert to independent contractor status. In 1996, Allstate announced it would terminate the contracts of some 1,600 employee agents in California unless they converted or retired. In November 1999, Allstate embarked on a nationwide conversion effort, in the wake of which most remaining employee agents either converted and signed a comprehensive release of all claims against Allstate in conjunction therewith, or retired. Plaintiffs contend that it was only at this time that they could have known how the Credited Service Amendment would affect them because it was only then that they converted from employee to independent contractor status and only then that they were denied credited service under the Plan. Allstate and its plan administrator consistently represented to the employee agents considering conversion during this time period that any service to Allstate provided after conversion would not count towards early retirement under the Pension Plan.