Three Allstate agents in Canada have filed a prospectiveclass-action suit against the Northbrook, Ill.-based carrierclaiming changes the company made in their contracts stripped themand other agents of their business and closed half its Canadianoffices.

The suit, filed in Ontario Superior Court of Justice in Torontoback in May, is claiming damages for breach of contract and breachof the nation's Employment Standards Act for at least $58 millionin damages ($60 million Canadian).

An Allstate spokesman said the company is reviewing thematter.

The suit claims that in July of last year Allstate “unilaterallyannounced substantive material changes to the employment contractterms with all of its sales agents, numbering approximately 450,across Canada.”

The changes altered the compensation system for the agents,robbed them of their renewal books of business and closed 256 agentlocations throughout the country to consolidate locations, the suitalleges.

The suit accuses the insurer of failing to pay termination andseverance payments to former employees. It also alleges the newagreement “reduced the wage rate and/or altered other terms andconditions of employment of” the Allstate agents.

The lawsuit was filed by Esther Kafka, Ketal “Ken” Patel andMark Cassells. Plaintiffs' attorney David Thompson, with the lawfirm Scarfone Hawkins in Hamilton, Ontario, said Mr. Patel is theonly one of the three who is presently an Allstate agent.

Mr. Thompson said by e-mail that the suit has not yet beencertified as a class-action suit, but “the case is meritorious” andthe “proposed class proceeding presents the only reasonable andpractical avenue for redress.”

Mr. Thompson went on to say that the Allstate agents believethey were not independent contractors but employees of the company.He could not say if the nature of the relationship between agentsand the company was similar to that in United States.

Allstate made a change in the U.S. producer contract eight yearsago affecting some 6,200 agents. That action eventually resulted inseveral suits and action by the U.S. Equal Employment OpportunityCommission, which said the company's policies purposely affected ahuge percentage of agents over the age of 40.

The suit has attracted the attention of many agents, Mr.Thompson said, adding, “We have been contacted by many agentsexpressing interest in and support for the action.”

Mr. Thompson said Allstate has replied to the suit, indicatingit plans to defend against it.