Flanagan v. Allstate Insurance

242 F.R.D. 421, 40 Employee Benefits Cas. (BNA) 2608, 2007 U.S. Dist. LEXIS 9779, 2007 WL 495279
CourtDistrict Court, N.D. Illinois
DecidedFebruary 9, 2007
DocketNo. 01 C 1541
StatusPublished
Cited by10 cases

This text of 242 F.R.D. 421 (Flanagan v. Allstate Insurance) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Flanagan v. Allstate Insurance, 242 F.R.D. 421, 40 Employee Benefits Cas. (BNA) 2608, 2007 U.S. Dist. LEXIS 9779, 2007 WL 495279 (N.D. Ill. 2007).

Opinion

MEMORANDUM OPINION AND ORDER

MORAN, Senior District Judge.

Plaintiffs Jay Flanagan, James Carson, John Chaney and Donald Jones originally brought this class action suit against defendants Allstate Insurance Company (Allstate) and its Agent Transition Severance Plan, for violation of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq., and breach of fiduciary duty. On June 24, 2004, we granted plaintiffs’ motion for class certification as to their constructive discharge claim and denied it as to the breach of fiduciary duty claim. Flanagan v. Allstate Ins. Co., 223 F.R.D. 489 (N.D.Ill.2004). On May 6, 2005, plaintiffs amended their complaint to include a breach of contract claim, (plf.am.cplt.). Plaintiffs Flanagan, Carson and Chaney now move to certify a class with regards to this claim.1 That motion is granted.

BACKGROUND

The full background of this case has been expounded upon in our earlier opinions. See Flanagan v. Allstate Ins. Co., 213 F.Supp.2d 862 (N.D.Ill.2001), Flanagan v. Allstate Ins. Co., 223 F.R.D. 489 (N.D.Ill.2004), and Flanagan v. Allstate Ins. Co., 228 F.R.D. 617 (N.D.Ill.2005). For purposes of this motion we will limit our scope to the facts pertaining solely to the breach of contract claim.

The following facts are taken from plaintiffs’ amended complaint. Plaintiffs, as agents for Allstate, worked under various employment contracts.2 Flanagan and Carson worked as general agents, Chaney worked under an R830 contract, and Jones worked under an R1500 contract.3 These [426]*426contracts were employee-agent contracts, entitling plaintiffs to Allstate’s ERISA-gov-erned retirement and benefit plans. Allstate had another type of contract where agents were employed as independent contractors. Among numerous other differences, these agents did not participate in the ERISA benefits program. A decision was made by Allstate to convert all of its employee agents into independent contractors, eliminating ongoing contributions to ERISA plans for thousands of agents. However, Allstate could not unilaterally amend or terminate the contracts of those employee-agents operating under the R830 contract because that contract provided for lifetime employment. Employee-agents were subject to termination only for “unsatisfactory work.” Therefore, in order to effectuate the plan, Allstate created a new set of uniform work rules in September 1998, entitled “Allstate Agency Standards.” The new work rules allegedly were implemented to harass employee-agents into either terminating their employment or retiring, or converting to independent contractor status. These requirements included reducing or freezing office expense reimbursements, extending office hours, requiring Saturday office hours, mandating attendance at multiple training sessions with little or no utility, and creating burdensome reporting requirements. As a result of these new work requirements over a thousand employee-agents retired, terminated their employment or converted to independent contractor status between December 1, 1998 and May 31, 1999 (def. second suppl. resp. to plf. first set of interrogatories at 2-3).

Subsequently, on November 10, 1999, Allstate announced a new program entitled, “Preparing for the Future.” This program required that all remaining employee agents convert to independent contractor status, retire or terminate their employment. The program offered a number of possible severance benefits for those who chose to leave their employment, and different incentives to those who chose to convert. After unveiling this program, Allstate chose to retroactively apply it to those employee agents who had terminated or converted from June 1, 1999, onward.

Plaintiffs allege that Allstate had been preparing this severance package and benefit plan long before June 1, 1999. They claim that Allstate instituted its new onerous work rules with the intent of harassing as many employee agents as possible into terminating or converting before unveiling the severance and benefit packages, so as to reduce the cost of the program. Plaintiffs claim that the institution of these work rules for this purpose violated their contracts. Plaintiffs seek to certify a class consisting of “Allstate employee-agents under contracts or agreements other than the R1500 contract, subject to Defendants’ changes in work rules set forth in the ‘Allstate Agency Standards’ of September 1998 or subsequent versions of the ‘A lístate Agency Standards’ that were announced prior to May 31, 1999, who retired, terminated, or converted to independent contractor status between April 1,1998 and May 31, 1999, but had not submitted notice of their retirement, or resignation prior to April 1,1998.”

Plaintiffs seek to exclude those employee-agents who worked under the R1500 contract, based on the court’s finding in Linker v. Allstate Ins. Co., 342 Ill.App.3d 764, 276 Ill.Dec. 695, 794 N.E.2d 945 (Ill.App.Ct.2003), that the R1500 contract was an at-will contract.

ANALYSIS

Rule 23 of the Federal Rules of Civil Procedure outlines the requirements necessary to certify a class action. There are two requirements, both of which must be satisfied, Part (a) states:

One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of [427]*427law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Once a plaintiff satisfies these requirements, he or she must still satisfy one of the three requirements under part (b). Here, plaintiff is seeking certification under part (b)(3), which requires that:

The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

In this motion we generally take the substantive allegations of the complaint as true and do not examine the ultimate merits of the case. Birnberg v. Milk Street Residential Assoc. Ltd., 2003 WL 21267103 (N.D.Ill.2003). However, we will probe the evidence available and “make whatever factual and legal inquires are necessary” to determine whether plaintiffs have met their burden under Fed.R.Civ.P. 23 to justify class certification. Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676 (7th Cir.2001). We note that Rule 23 is to be liberally construed and that we should err in favor of maintaining a class action. King v.

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Bluebook (online)
242 F.R.D. 421, 40 Employee Benefits Cas. (BNA) 2608, 2007 U.S. Dist. LEXIS 9779, 2007 WL 495279, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flanagan-v-allstate-insurance-ilnd-2007.