Allstate Agents Group Votes To Form Guild As Commissions Overhauled

Members of an organization that represents Allstate Corp. (ALL) insurance agents voted Wednesday to affiliate with the Office and Professional Employees International Union, or Opeiu.

The organization, called the National Association of Professional Allstate Agents, or Napaa, will become its own guild within the union. As a guild, it has no power to collectively bargain on behalf of Allstate agents, but can call upon the union's resources when needed.

Napaa claims about 1,200 members. An Opeiu representative said more than half participated in the vote, and about 94% of those voted in favor of the affiliation.

Allstate executives said in June the company had 10,000 local agents. The agents have been independent contractors instead of Allstate employees since the company overhauled its sales force in 2000.

The vote comes at a time when Allstate has undertaken a major overhaul in the way it rewards Allstate agents. The company is reducing its base commission but increasing the bonuses it pays to top-performing salespeople, and pushing smaller, underperforming agencies to sell to larger ones.

That's a reversal from just a few year earlier, when the company was making a big push to build new agencies from scratch.

"Affiliating with Opeiu is the first step toward ensuring that Allstate agents are treated as true independent contractors instead of employees," said Jim Fish, the organization's executive director. "Currently, agents are subjected to unachievable quotas, the specter of reduced compensation and an ever-present threat of contract termination."

Allstate Chief Executive Tom Wilson dismissed Napaa's efforts on a conference call with analysts and investors earlier this month.

"A guild doesn't mean anything if you want to form a union. You actually have to be recognized by the National Labor Relations Board," Wilson said. The organization is "a small group, or we think a small group. It's not officially any group that anybody really interacts with the company on."

An Allstate spokeswoman said Wednesday, "this group's vote to affiliate with the Opeiu would seem to be an internal issue for them. Their members include only a small number of Allstate's current agency owners."

-By Erik Holm, Dow Jones Newswires; 212-416-2892; erik.holm@dowjones.com

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