Because of the moratorium, the suit alleges, a number of agents over 40 who left Allstate following the restructuring process were denied re-employment with Allstate in other positions.

According to the Equal Employment Opportunity Commission, such conduct violates the Age Discrimination in Employment Act of 1967, which prohibits employment discrimination based on age against those 40 and older.

In 2000, Allstate decided to dismiss some 6,200 "employee-agents" in 47 states, 90 percent of whom were over the age of 40.

These agents were given choices to either continue to work as independent contractors representing Allstate?but without the prior benefits including pensions and health insurance?or sell their books of business to other agents. Otherwise they could resign with a severance package, provided that they signed an agreement not to sue Allstate.

At the time of conversion, about 60 percent of employee-agents chose to become independent contractors and remain with the company, while about 400 took the enhanced severance option.

"Under this reorganization, they terminated all of their employees who were agents," said C. Felix Miller, the commission lawyer in charge of the Allstate case. And after the reorganization, he explained, Allstate said they wouldn't hire any of the agents they terminated as part of restructuring for a period of one year, or for any period in which they were receiving a severance benefit.

"But a lot of Allstate employees who were affected by this reorganization?they were very interested in continuing their employment at Allstate," Mr. Miller noted. "They wanted to be able to retain their pension and other fringe benefits."

"What our suit alleges is that Allstate's hiring moratorium had an adverse impact on persons who were age 40 or over," Mr. Miller said. "The age discrimination employment act protects people who are age 40 or over from age discrimination?and Allstate didn't have a valid business reason for implementing the moratorium and therefore it violated law.

Allstate is already involved in another litigation regarding its 2000 restructuring?which is currently ongoing in Federal District Court in Philadelphia. That lawsuit was also filed by the Equal Employment Opportunity Commission as well as by former Allstate agents who were dismissed following the company's reorganization process.