Tabor v. Allstate Ins. Co.
| Decision Date | 01 December 2015 |
| Docket Number | CIVIL ACTION NO. 15-2602 |
| Parties | RODNEY TABOR, et al., Plaintiffs, v. ALLSTATE INSURANCE COMPANY, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Currently pending before the Court are: (1) the Motion by Defendants Allstate Insurance Company, the Allstate Corporation, Agents Pension Plan, and the Administrative Committee (collectively "Defendants" or "Allstate") to Dismiss certain claims alleged in the Plaintiffs' Complaint; and (2) the Partial Motion of Defendant Edward M. Liddy ("Liddy") to Dismiss Plaintiffs' Complaint. For the following reasons, the Motions are granted in part and denied in part.1
The underlying facts are well known to the parties and were summarized in great detail in the Court's Memorandum Opinion dated February 27, 2014. In lieu of rehashing the complicated and convoluted history of this matter, the Court incorporates by reference the recitation of factsset forth in that previous Memorandum. See Romero v. Allstate Ins. Co., 1 F. Supp. 3d 319 (E.D. Pa. 2014).
By way of brief review, this litigation revolves around Allstate's announcement and implementation of its Preparing for the Future Group Reorganization Program ("the Program"). Prior to November 1999, the majority of Allstate's captive agency force acted as employee agents, under either an R830 or an R1500 contract, and was entitled to a wide range of company-sponsored health, welfare, and retirement benefits. On November 10, 1999, Allstate announced the Program by noting that, as part of a new business model, it was reorganizing its entire captive agency force into a single exclusive agency independent contractor program. With few exceptions, Allstate terminated the employment contracts of the 6,200-plus R830 and R1500 employee agents effective no later than June 30, 2000. While the Program applied to all agents regardless of age, productivity, or performance, approximately ninety percent of the R830/R1500 agents were over forty years of age.
In connection with the termination of the R830 and R1500 employment contracts, Allstate offered the agents working under those contracts four options. The first three options were conditioned upon the agents' agreement to execute a release of claims, while the fourth option did not. The first "release-based" option was the "EA Option." According to the Program Information Booklet, this option would allow the agent to enter into an R3001C or R3001S Agreement, thereby converting the agent from an employee to an Exclusive Agent ("EA") independent contractor. The agent would then be entitled to all of the benefits and requirements of that contract, including increased renewal commissions, a conversion bonus, earlier transferability in the agent's book of business, debt forgiveness, and reimbursement for movingexpenses if necessary. The R3001 contract, however, did not entitle agents to the same employee benefits.
The second option was the "Sale Option." This option also permitted an agent to enter into an R3001C/S Agreement with Allstate, thus converting the agent to an EA independent contractor. In turn, the agent would receive a "conversion bonus" and Allstate would forgive any advances owed, assume certain lease and advertising obligations the agent incurred as an employee agent, and permit the agent, after thirty days' service as an EA, to sell his or her book of business written while an R830 or R1500 agent. This option also required the agent to sign a release.
The third option was the "Enhanced Severance Option." Under this option, Allstate would pay the agent "enhanced" severance equal to one year's pay based on the greater of 1997 or 1998 total compensation, forgive debt and/or expenses that Allstate had advanced to the agent, and relieve the agent of certain lease and advertising obligations incurred as an R830 or R1500 agent. This option was unavailable unless the agent signed a release.
The final option was the "Base Severance Option." If an agent elected this option, then Allstate paid him or her up to thirteen weeks of pay. The agent electing this option did not need to enter into a release, although he/she was subject to certain additional non-compete and non-solicitation obligations. Notably, Allstate had determined that agents affected by the Program were ineligible for the pre-existing severance or post-termination pay plans because they were not terminated for any of the reasons set forth in those plans. Allstate also took the position that the pre-existing severance/post-termination pay plans were inapplicable because they did not apply to group reorganization programs.
The release required by the first three options (the "Release") was three pages long, including a signature page. The Release and Waiver Provision stated, in pertinent part:
I hereby release, waive, and forever discharge Allstate Insurance Company . . . from any and all liability . . . or claims for relief or remuneration of any kind whatsoever . . . arising out of, connected with, or related to, my employment and/or the termination of my employment and my R830 or R1500 Agent Agreement with Allstate, or my transition to independent contractor status, including, but not limited to . . . any claim for age or other types of discrimination prohibited under the Age Discrimination in Employment Act of 1967 . . . the Employee Retirement Income Security Act ("ERISA") . . . or any other federal, state, or local law or ordinance or the common law.
(Compl ¶ 88.)
Several employee agents subject to this Program brought age discrimination charges against Allstate with the Equal Employment Opportunity Commission ("EEOC"). On August 1, 2001, thirty-two employee agents (the "Romero Plaintiffs") filed a putative class action complaint against Allstate in connection with the Program. The Romero Plaintiffs filed their First Amended Complaint on October 18, 2001, and their Second Amended Complaint on July 28, 2010. On February 27, 2014, this Court ruled on the parties' cross-motions for summary judgment regarding the validity of the Release and held that a genuine issue of fact remained as to whether the Release was knowingly and voluntarily signed. Thereafter, following the October 6, 2014 denial of class certification on issues regarding the validity of the Release, the Court determined that the statute of limitations for the non-party employee agents resumed running and that they were required to file an action in order to pursue their claims.
On May 11, 2015, ten new Release-signers (the "Tabor Plaintiffs") filed a Complaint and subsequently moved to intervene. This Complaint brings the following causes of action: (1) arequest for declaratory judgment on the invalidity of the Release under ERISA, the ADEA, and common law (Count I); (2) breach of the R830 contract (Count II); (3) breach of the R1500 contract (Count III); (4) interference with employment and retaliation in violation of Section 510 of ERISA (Count IV); (5) discriminatory termination and retaliation in violation of 29 U.S.C. § 623(a) and (d) (Count V);2 (6) breach of fiduciary duty (Count VI); (7) cutback of "beefed up" early retirement benefits in violation of 29 U.S.C. § 1054(g)(2) (Count VIII); and (8) cutback of early retirement benefits in violation of 29 U.S.C. § 1054(g) (Count IX).3 The Tabor Plaintiffs thereafter moved to intervene in the Romero v. Allstate matter, Civil Action No. 01-3894, and, on September 21, 2015, the Court granted the Motion to Intervene.
On July 27, 2015, Defendants Allstate and Liddy filed Motions to Dismiss the Tabor Plaintiffs' Complaint. All Plaintiffs submitted a response on August 27, 2015, and on September 17, 2015, Allstate and Liddy filed Reply Briefs. The Motions are ripe for judicial consideration.
Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), the United States Supreme Court recognized that "a plaintiff's obligation toprovide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. Following these basic dictates, the Supreme Court, in Ashcroft v. Iqbal, 556 U.S. 662 (2009), subsequently defined a two-pronged approach to a court's review of a motion to dismiss. Id. at 678. Thus, although "Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era . . . it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79.
Second, the Supreme Court emphasized that "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 679. "Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. A complaint does not show an entitlement to relief when the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct. Id.; see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 232-34 (3d Cir. 2008) ...
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