This excerpt taken from the ALL 10-Q filed Nov 1, 2005.
William Sekly vs. Allstate Insurance Company, and filed on or about November 27, 2000 (the Lawsuit).
C. The operative complaint in the Lawsuit shall be the amended complaint (the Class Complaint) referred to in paragraph 5 below, which alleges, among other things, that Defendant improperly classified the Class Members as exempt employees, misrepresented that such Class Members were exempt employees, and failed to pay overtime compensation and/or to provide Breaks to such Class Members. Defendant denied said allegations in their entirety and alleged that the Class Members were properly classified as exempt employees and that any and all compensation and/or Breaks due to such Class Members was paid and/or provided according to law.
D. The matter has been litigated before the Hon. Anthony Mohr, Judge of the Court.
E. On August 23, 2002, the Court, over Defendants objection, certified this matter as a class action for the determination of the issue of liability, and on January 19, 2005, the Court, again over Defendants objection, further certified this matter as a class action for the determination of damages.
F. The Court has approved the following law firms as Class Counsel for the Plaintiff Class:
This excerpt taken from the ALL 8-K filed Sep 1, 2005.
William Sekly, et. al., v. Allstate Insurance Company, pending in the Superior Court of California, County of Los Angeles (the Court). Previously disclosed in the Companys annual reports on Form 10-K and quarterly reports on Form 10-Q, this litigation challenged the overtime exemption claimed by AIC under California wage and hour laws. The Company continues to deny any liability or wrongdoing with respect to the claims raised in the lawsuit.
Under the Agreement, AIC is obligated to pay no more than $120 million. This payment is all inclusive, including, but not limited to, unpaid overtime pay, pay for meal and rest break violations, any and all associated penalties, interest, employer tax contributions, costs, attorneys fees, class administration costs, referee costs, and incentive payments to the named plaintiffs. The settlement proceeds are to be paid to class members, in exchange for a release, as described in the Agreement. The class is comprised of all persons who, between November 27, 1996 and December 31, 2004, were employed by AIC in California as claims adjusters or in similar positions as described in the Agreement. In the second quarter of 2005, as previously disclosed, the Company established a $120 million reserve for the potential settlement of this matter.
The Agreement is contingent upon various conditions, including, but not limited to, preliminary approval by the Court and final approval by the Court after notice to the class and a hearing. There can be no assurance that the Agreement will be approved by the Court nor upheld if challenged on appeal.