Third Circut Nixes EEOC Retaliation Suit

Last week, in Equal Employment Opportunity Commission ("EEOC") v. Allstate Insurance Co., No. 2-01-cv-07402 (3d Cir. Feb. 13, 2015), the Third Circuit affirmed that the defendant did not violate federal anti-retaliation laws by offering thousands of terminated at-will employees the opportunity to continue working as independent contractors in exchange for signing a release.

By way of background, the defendant here decided to reorganize its business and, in the process, terminate more than 6,000 sales agent employees.  In connection with their termination, the employees received the option to convert to independent contractor status if they executed a release waiving any existing legal claims against the company.  Employees who chose conversion also received a bonus of at least $5,000, repayment of office expense advances, and a transferable interest in their books of business in two years' time (rather than the standard five).