Full opinion text
TABLE OF CONTENTS FOB CROSS-MOTIONS FOR SUMMARY JUDGMENT AS TO THE VALIDITY OF THE RELEASE RONALD L. BUCKWALTER, Senior District Judge. I. FACTUAL BACKGROUND . CO A. Allstate’s Agency Programs Prior to 1999. CO 1. The NO A Program . CO 2. R830 and R1500 Contracts. CO 3. Allstate’s Exclusive Agent Independent Contractor Program . CO 4. Allstate’s Litigation with the IRS. CO B. The Preparing for the Future Group Reorganization Program 00 1. The Sales Organization of the Future Initiative. CO 2. Background Behind the Preparing for the Future Program .. CO 3. The Announcement of the Preparing for the Future Program. CO CO 5. The Release . CO 6. The OWBPA Disclosure. CO 7. State-Specific Issues. CO a. New Jersey. CO b. Montana. CO c. West Virginia. CO d. Delaware. CO 8. Alleged Misrepresentations by Allstate about the Program. CO a. Confidentiality and Non-Compete Restrictions . CO b. Rehire Policy. CO c. Commission Rates. CO d. Expected Results for R3001 Agents. CO e. C. The Romero Plaintiffs. CO 1. General Information. CO 2. Plaintiffs’ Consultations Regarding the Program and Release. CO 3. Plaintiffs’ Program Option Selections. CO a. The EA Option. CO . CO c. The Enhanced Severance Option. CO d. The Base Severance Option. CO 4. Rationales’ for Plaintiffs’ Program Selections. CO 5. EEOC Charges . CO D. Procedural History. CO II. SUMMARY JUDGMENT STANDARD OF REVIEW. o CO CO III. DISCUSSION. A. Whether the Release Reaches All of The Claims Asserted in Romero I and Count II of Romero II. 3 CO 1. Romero I Claims and Count II of Romero II. 3 CO 2. Counts I and III of Romero II . co CO a. Whether the Language of the Release Excepts Out the Claims or Is Ambiguous and Should Be Construed in Plaintiffs’ Favor. CO Oí cn (i) “Claim to Benefits”. CO Oí (ii) “Benefits to which I am entitled”. CO o b. Whether Counts I and III Arose After the Execution of the Release. CO CO c. Whether Plaintiffs’ ERISA Claims Are Protected by ERISA’s Anti-Alienation Provision. 3. Conclusion Regarding the Scope of the Release. CO CO -Q o\ co B. Whether the Release Is Valid. CO —3 oí 1. Compliance with the OWBPA Disclosure Requirements CO —3 en a. The Disclosure Requirements . CO ""3 <1 (i) Voluntary and Involuntary Terminations .. CO —•3 co (ii) Montana Agents CO 00 H* (iii) Exclusion of R3000 Agents from the List of Those Not Eligible or Selected. CO 00 CO (iv) Inclusion of New Jersey Agents. CO CO CR b. The “Understandability” Requirement. CO 00 -3 (i) Complex Language. CO 00 00 (ii) Whether the Release Created the False Impression that Agents Could Not Challenge Its Validity or File EEOC Charges. CO <x> I — e. The Consideration Requirement. CO co <1 (i) Whether Plaintiffs Were Entitled to Continued Employment and Employment Benefits. CO co -3 (ii) Whether Allstate Provided Plaintiffs With Any Consideration in Addition to That to Which They Were Already Entitled. CO CO CO (iii) Conclusion as to Consideration. ^ o ^ d. Conclusion as to the OWBPA Requirements. ^ o 2. Whether the Release Was Knowingly and Voluntarily Executed Under the Totality of the Circumstances. (O a. Whether the Release Was Voluntarily Signed. b. Whether the Release Was Knowingly Signed. t — i c. Conclusion as to Knowing and Voluntary Execution of the Release. tr-t — i 3. Whether the Release Was Unconscionable. c-1 — i a. Procedural Unconscionability. 1 — I b. Substantive Unconscionability. oo r — t IV. CONCLUSION. .419 MEMORANDUM Currently pending before the Court are the Cross-motions for Summary Judgment by Plaintiffs Gene R. Romero, et al. (collectively “Plaintiffs”), Defendants Allstate Insurance Company, et al. (collectively “Allstate” or “Defendant”), and Defendant Edward M. Liddy as to the Validity of the Release. For the following reasons, all Motions are denied. I. FACTUAL BACKGROUND The factual and procedural background of this case is a lengthy and convoluted one, commencing in 1999 and spanning to the present day. The general facts are well-known to both the parties and the Court. The sole issue of relevance at this juncture is whether the release of claims signed by Plaintiffs is valid and/or bars Plaintiffs’ claims for relief. For the sake of both simplicity and judicial economy in an already complex case, the Court will set forth only the basic, undisputed facts regarding the events that led to this litigation and will deal with the disputed issues of fact regarding the Release in the course of the legal discussion. A. Allstate’s Agency Programs Prior to 1999 Defendant Allstate Insurance Company is an Illinois Corporation that sells insur-anee and related products and services. Defendant Edward M. Liddy is the former President, Chief Executive Officer, and Chairman of Allstate. He served as Chief Operating Officer from August 1994 to January 1999, as Chief Executive Officer from January 1999 to May 2005, and as Chairman of the Board of Directors from January 1999 to April 2008. As of November 1999, Allstate’s agency force included approximately 15,200 captive agents that worked for either Allstate Insurance Company or Allstate New Jersey and could sell and service only Allstate authorized products. Approximately fifty-four percent of the agents operated under one of several employment contracts — the R830 Agent Compensation Agreement, the R1500 Agent Employment Agreement, the eighteen-month R3000 Exclusive Agent Employment Agreement, or the eighteen-month R4616 associate agent contract. After eighteen months under the R3000 contract, Allstate offered approved agents the R3001 contract. The R4616 contract was self-terminating after eighteen months and, with good performance by the agent, could lead to an additional contract. The remaining forty-six percent of agents worked as independent contractors under the R3001 contract. All of the Plaintiffs in this case, except Arlene Wendt, were employed as an employee agent under either an R830 or R1500 contract. Each of the agent programs and contracts had a variety of differing terms. Allstate’s R830 and R1500 contracts, however, were not subject to negotiation and were therefore uniform or “standardized.” All captive agents, regardless of their contract, sold the same products and had the same managers. In addition, as of November 1999, Allstate had about 400 captive employee agents in Canada who sold Allstate property and casualty insurance. 1. The NOA Program Prior to 1984, Allstate sold its insurance products primarily through employee agents located in Sears retail stores or in Neighborhood Sales Offices or Local Sales Offices. In 1984, Allstate introduced the Neighborhood Office Agent (“NOA”) Program, the reasons for which are disputed by the parties. At the time it introduced the NOA Program, Allstate also introduced the R1500 Agreement. Existing R830 agents could continue working under their existing agent program or voluntarily enter the NOA Program by either signing an amendment to the R830 Agreement or entering into an R1500 Agreement. Also effective in 1984, all new agents joining Allstate were required to both be NOAs and work under the R1500 Agreement. The R830 and R1500 Agreements were employee contracts. According to Allstate, the NOA Program was designed to provide employee agents more “entrepreneurial” discretion than those working in Sears stores or company-owned Neighborhood Sales Offices since NOA agents were able to operate individual Allstate agencies with clerical and solicitor support staff they hired through a temporary agency and could choose their locations and officer partners. To market the NOA Program to its existing agents, Allstate represented that if “you” wanted to have “a proprietary interest in a business,” “choose your own office site,” “select your own clerical help,” “have unlimited income potential,” and still “have job security,” then “you” should become an Allstate NOA. (Declaration of Coleen M. Meehan (“Meehan Decl.”), Ex. 92 (“NOA Brochure”), at RH05112.) Plaintiffs, on the other hand, believe that the NOA Program was designed to shift costs from the company to the employee agents and grant the agents a clear “proprietary interest” in the business. Allstate required the NOA employee agents to lease or otherwise secure their agency office location in their own names within an Allstate specified geographic area. Agents in the NOA Program also paid their own office and operating expenses, including telephone lines, certain of which were subject to reimbursement from an Allstate-provided office expense allowance (“OEA”). NOA agents had discretion to manage their OEA funds and office expenses, but the OEA was not always sufficient to cover routine office expenses. The maximum amount of OEA reimbursement available under the NOA employee program was approximately twenty percent of the commissions earned when a policy was issued or renewed. Agents had to invest their own funds to pay for operating costs above the OEA. Indeed, Allstate’s NOA Ready Reference Guide for Market Sales Managers directed managers, when interviewing prospective NOAs, to “[m]ake sure that the candidate is willing and able to spend his or her money....” (Meehan Decl., Ex. 98 (“NOA Ready Reference Guide”), at ARI 142109.) The NOA Manual also stated that an agent could obtain an OEA advance from Allstate to pay up front expenses. Agents who received an OEA advance signed a “permanent advance receipt” acknowledging that the funds were Allstate’s property and that the agents promised to repay them. The NOA Manual provided that unpaid advances outstanding at termination would be deducted from final pay and/or reimbursement where permitted by law. Plaintiffs contend that, over the years, Allstate urged all of its NOA agents to invest in their agencies. In turn, many of the Plaintiffs made substantial investments in their agencies. All Plaintiffs incurred over $10,000 in unreimbursed business expenses, and over half incurred such expenses in excess of $100,000. 2. R830 and R1500 Contracts The introductory paragraph of Allstate’s R830 contract represented to employee agents that their “agreement was carefully planned to provide you with financial opportunity and security!, including] ... the security of continued income gained through renewals!,] ... the opportunity to share in the profits you help create, and the usually broad protection plans for you and your family through the Allstate benefit package. (Declaration of Jordan M. Heinz (“Heinz Decl.”), Ex. 10 (“R830 Agreement”), at ARI 020338.) The R830 Agreement, however, provided that, “You do not have ... any vested interest in any business produced under the terms of this agreement.” (Id. Part Four ¶ II, at ARI 020346.) Similarly, the R1500 Agreement provided that “[t]he Company will own all business produced under the terms of this Agreement. You acknowledge that you have no vested interest in such business.” (Heinz Decl., Ex. 11 (“R1500 Agreement”) ¶ 3.b, at ARI 002036.) Employee agents under the R830 and R1500 agents were eligible for a wide range of company-sponsored health and welfare benefits, including group medical insurance coverage for themselves and families, group dental insurance coverage for themselves and families, group vision care coverage for themselves and families, group long term care insurance, group long term disability insurance, group life insurance coverage, group accidental death and dismemberment (AD & D) insurance coverage, use of pre-tax Flexible Spending Accounts, group coverage for certain legal services, and paid vacation. In addition, all full-time employee agents were entitled to a “production allowance” paid by Allstate to compensate for new business production lost because of authorized absences or attendance at certain company meetings. Both the R830 and the R1500 Agreements had termination provisions. The R830 Agreement stated as follows: This agreement will automatically terminate upon your death. Either you or Allstate have the right to terminate this agreement upon mailing to the other, at his or its last known address, written notice of termination. After such termination you agree not to act or represent yourself in any way as our agent. The Company will not terminate your employment because of unsatisfactory work unless you have been notified that your work is unsatisfactory and that your job is in jeopardy and unless you have been given a reasonable opportunity to bring your performance up to satisfactory standards.... In no event shall an employee be released for any reason without the following review and approval procedure having been adhered to ... (Heinz Deck, Ex. 10, R830 Agreement, Part Four ¶XI.) Employees who signed the R830 contract had the right to have any involuntary termination reviewed by the Agent Review Board. Likewise, the R1500 Agreement contained the following termination provision: Your employment and this Agreement will automatically terminate upon your death, retirement, loss or relinquishment of your insurance agent license, or failure to return to work upon expiration of a leave of absence. In addition, your employment and this Agreement may be terminated at will by either party, subject only to such limitations and restrictions as may be imposed by law, and in accordance with Company rules and procedures. Termination shall be effective upon giving notice of termination orally or in writing, delivered personally or mailed to the last known address of the other. Upon termination, you agree not to act or represent yourself in any way as an employee, agent or representative of the Company, except as otherwise agreed to in writing by you and the Company. (Heinz Deck, Ex. 11, R 1500 Agreement, ¶ 11, at ARI 002038) The R1500 Procedure Manual also provided for agents to receive a job in jeopardy notice, be given a reasonable opportunity to cure, and receive a review of the termination through the Agent Review Board. Although neither the R830 Agreement nor the R1500 Agreement provided severance or post-termination pay in the event of termination, Allstate maintained two pre-existing ERISA plans — the Allstate Severance Pay Plan and Allstate Service Allowance Plan — in the event of certain types of involuntary terminations. The Allstate Severance Pay Plan stated that post-termination pay could be provided under the Allstate Severance Pay Plan if the agent’s employment was “involuntarily terminated by the Employer for lack of work, employees, rearrangement of work, or reduction in workforce, as determined in the sole discretion of the appropriate Human Resource Account Team leader of the Employer.” (Heinz Deck, Ex. 24, (“Allstate Severance Pay Plan”), at A046690.) It expressly did not apply to employees “terminated under the terms of any group reorganization/restructuring benefit plan or. program sponsored by the Employer.” (Id.) The severance benefit under the Allstate Severance Pay Plan was “two (2) weeks of pay for each complete year of service [up] to a maximum of fifty-two (52) weeks of pay.” (Id. at A46692.) This plan did not impose any non-solicitation or non-compete obligations. The Allstate Service Allowance Plan provided for post-termination pay if the agent’s employment was “involuntarily terminated by the Employer for inability to satisfactorily perform the responsibilities of his/her position as determined in the sole discretion of the appropriate Human Resource Account Team Leader of the Employer.” (Heinz Deck, Ex. 25 (“Allstate Service Allowance Plan”), at A004944.) The amount of the mandatory service allowance under this plan depended on the agents’ completed years of service and ranged from “two weeks of pay (for 1-4 years of continuous service) and thirteen weeks of pay (for 20 and over years of continuous service).” (Id. at A004945.) Like the previous plan, this plan did not impose any non-solicitation or non-compete obligations. R830 and R1500 employee agents also participated in the Pension Plan, a traditional defined benefit plan designed “to provide, at no cost to employee agents, an income based on [their] level of compensation and length of employee service, upon retirement.” (Meehan Deck, Ex. 67 (“Agents Pension Plan”), at A008649.) Under the Pension Plan’s benefit formula, the greater the agent’s compensation and the greater their years of service, the larger their pension benefit at retirement, although the Pension Plan benefits ceased accruing once an agent hit a certain income level. Normal retirement benefits were payable on or after age sixty-five, but those with twenty or more years of continuous service could retire and start their benefit as early as age fifty-five. In addition, those who completed twenty or more years of continuous service were entitled to an early retirement subsidy for a “beef-up” of the compensation used in calculating their pension before Allstate purported to phase out the benefit between 1991 and 1999. “Continuous service” required that an employee have no more than twelve months between any termination of or retirement from employment with Allstate and his/her reemployment by Allstate. Aside from employer-provided pension benefits, R830 and R1500 agents could fund their retirement through Allstate’s 401(k) plan — the Savings and Profit Sharing Fund — and receive an annual company match up to a certain percentage. In addition, Allstate had long provided subsidized medical coverage for its retirees and their eligible dependents, as well as retiree life insurance benefits for those eligible. To be eligible for retiree medical and life, employee agents needed to work as Allstate employees until they attained at least (a) age sixty or (b) age fifty-five with at least twenty years of continuous service. These eligibility requirements were reduced to age fifty with at least ten years of service in cases involving “a right sizing, migration environment, or for health reasons.” (Meehan Deck, Ex. 69 (“March 12, 1993 Memo to Managers”), at ARI 071978.) If an R830/R1500 agent converted to an Exclusive Agent (described below), the agent forever lost the opportunity to receive the retiree medical or life insurance benefits. Like the Pension Plan, the greater the number of years of service completed by an R830/R1500 agent, the greater the company subsidy for retiree medical coverage. Each year, Allstate provided all R830 and R1500 agents with a personalized statement of “total compensation,” which Allstate defined as comprising both pay and benefits to highlight their compensation from a total package benefit perspective. In these statements, Allstate emphasized the importance of the benefits and noted that they were a significant component of their total compensation. Allstate included paid time off as a component of the agents’ compensation. Independent contractors were not offered similar benefits. 3. Allstate’s Exclusive Agent Independent Contractor Program In 1990, Allstate introduced the Exclusive Agency (“EA”) Program. In that Program, agents could first operate under an eighteen-month provisional R3000 employee contract. After eighteen months under the R3000 Contract, Allstate offered approved agents the R3001 contract to become so-called independent contractor Exclusive Agents. Alternatively, agents could enter directly as independent contractors under an R3001 Agreement. With the introduction of the R3000/R3001 contracts, Allstate ceased using the R1500 contract for newly hired agents. This was the first time in Allstate’s history that it deviated from an all-employee agency force. The R3001 Agreement differed from the employee agent programs in several respects. First, the R3001 expressly provided that agents under this Agreement were “independent eontractorfs] for all purposes and not ... employee[s] of the Company.” (Heinz Deck, Ex. 31 (“R3001 Agreement”), at I.B.) Second, Allstate contends that while employee agents were required to run individual agencies under Allstate’s supervision, EAs had more flexibility in their office operations — a fact which Plaintiffs dispute. Third, agents operating under the R3001 contract accrued an immediate vested interest in the business developed under the R3001 contract, and those who converted to the EA Agreement before January 1, 2000 possessed an “interest,” transferable after a set period of time, in the policies and accounts that they had generated while working as an employee under the R830 and/or R1500 contracts. Fourth,, renewal commissions payable to EAs were greater than the commissions payable to R830 and R1500 agents. Fifth, EAs were not entitled to the same office expense reimbursements as R830/R1500 agents. Finally, EAs were not given the same employee benefit entitlements of R830/R1500 agents. R830 and R1500 agents could apply to convert to the EA Program. In order to convert, agents had to undergo a multi-step application process, which included submission of an Exclusive Agent Appointment Request, a Letter of Understanding, a business plan, and a final approval request, as well as repayment of all outstanding advances to Allstate. Between 1990 and May 1998, agents who wished to convert also had to meet certain production requirements and have certain ratings on their most recent evaluations. As of June 1998, however, Allstate eliminated the production and performance criteria for conversion to the EA program. Agents that converted to the EA Program from the R830 or R1500 Agreements between 1990 and November 1999 did not receive a conversion bonus. In addition, for those R830 or R1500 agents who converted to the EA Program prior to November 1999, their economic interest in the book of business serviced while an employee agent became transferable after five years, subject to Allstate’s approval. Allstate encouraged employee agents to convert to this program. Although some agents had converted to the EA Program by 1999, it is unclear exactly how many. Notably, all employee agents who converted to the R3001 Agreement prior November 1999 could do so without having to sign a release. 4. Allstate’s Litigation with the IRS In the mid-1990s several employee agents in the NO A Program obtained a tax court ruling in the case of Butts v. Commissioner of Internal Revenue, 49 F.3d 713 (11th Cir.1995). The court found that the agents had proven that their professional relationship with Allstate was not as employees, but rather as independent contractors, meaning that their business deductions were to be reported under Schedule C of the tax return and not as Schedule A unreimbursed employee business expenses. Id. This ruling meant that the continued participation of independent contractors in Allstate’s tax-qualified employee benefit plans could have resulted in those plans losing their tax-qualified status. Allstate and the Internal Revenue Service (“IRS”) subsequently entered into amicable negotiations in order to resolve how to maintain the employee pension plans. Several options were discussed. Allstate’s first option, proposed by the IRS, was for Allstate to re-classify all employee agents as independent contractors. Allstate rejected this proposal and insisted on continuing the NOA program as an employee option. As it stated to the IRS: [Cjonverting all NOAs to independent contractors would result in a quagmire of litigation and severely disrupt the business activities of Allstate’s agents. Such a change would require amending or terminating the NOAs’ compensation agreements [i.e., R830/R1500 contract] to reflect independent contractor status. A unilateral change to the compensation/expense reimbursement structure for this agent group would undoubtedly lead to litigation and significantly damaged Allstate’s relationship with the agents.... The NOAs are long-service employees. They have expected to be compensated as employees and receive the fringe benefits that Allstate has traditionally provided. Not only would individuals lose future benefit plan accruals and contributions if they were all converted to independent contractors, many of these individuals have spent all of their careers with Allstate and have hoped to retire with retiree life and medical benefits. Ceasing the NOAs’ employee service at this juncture in their careers would have severe economic consequences to them. (Meehan Deel., Ex. 54 (“Allstate Insurance Company Pre-Submission for June 23, 1997 Meeting”), at ARI10110.) Next, the IRS proposed that Allstate eliminate the financial risk faced by NOAs by paying for more or all of their business expenses. Allstate likewise rejected this solution. Finally, Allstate proposed that it could change financial control over the NOAs by limiting office rent and support staff to the total of an agent’s OEA. After several years of negotiations, Allstate and the IRS finally reached an agreement in 1998 (the “IRS Closing Agreement”). This Agreement provided, in part, that beginning by January 1, 1999, NOAs were to perform services for Allstate under the following express terms: 1. Allstate shall restructure its compensation and expense allowance for NOAs as of January 1, 1999. Any changes to an NOA’s compensation and expense allowance as of that date and thereafter shall be made only upon approval by the company. 2. Allstate shall pay directly or maintain a system of reimbursement for Allstate business expenses that are approved by the Company and incurred by an NOA, including office lease and support staff, and Allstate may limit reimbursements to the amount of an NOA’s office expense allowance that is established by the Company. 3. Allstate shall require that no NOA incur combined expenses for office lease or for support staff services that exceed the amount of the NOA’s office expense allowance from the Company. 4. Allstate shall pay a minimum compensation amount to each NOA, regardless of the premium income attributable to such agent. 5. Allstate shall instruct NOAs on how to conduct sales for each of its major product lines and train NOAs on the means and manner of interacting with customers, including specific dialogues and procedures to be followed with customers and policyholders. 6. Allstate shall maintain a system under which NOAs are managed and evaluated on the basis of adherence to the Company’s policies and practices. 7. Allstate shall require that NOAs work full-time and maintain specified office hours. (Heinz Decl, Ex. 41 (“IRS Closing Agreement”), at ARI 04485.) In March 1998, Allstate announced to agents that the changes agreed to by Allstate in the Closing Agreement with the IRS would take effect on January 1, 1999. In turn, Allstate required agents to sign an “Acknowledgment of Understanding,” in which NOAs specifically agreed and acknowledged as follows: By signing this Acknowledgment of Understanding (“Acknowledgment”) which is effective January 1, 1999 and continues in effect so long as I am employed under the R830 or R1500 Agreement, I acknowledge that I am an employee of Allstate Insurance Company (“Allstate”) and that Allstate has the right to control the manner and means by which I perform services for Allstate. I acknowledge that, as a condition of my continued employment, I am required to act in a manner consistent with my status as an employee of Allstate. Note: Under the federal tax laws, unreim-bursed expenses incurred by employees may be reported only on Form 2016 (Employee Business Expenses). Such expenses reported on Form 2106 are required to be transferred to, and deducted, Schedule A of Form 101.0. If I do not act consistently with my status as an employee, I understand that (1) my R830 or R1500 Agreement, as well as my employment with Allstate, may be terminated at the sole discretion of Allstate and (2) thereafter, Allstate may choose not to allow me to perform agent related services as an independent contractor. I further understand that if I do not, or if any other agent working under the R830 or R1500 Agreement does not, act consistently with employee status, such actions could, among other things, lead to the discontinuation of Allstate’s employee agent programs. (Heinz Deck, Ex. 42 (“Acknowledgment of Understanding”) (emphasis in original).) In addition, Allstate required agents in the NOA Program to prepare Office Expense Allowance Worksheets to comply with paragraph three of the foregoing Closing Agreement requirements. If the amount of OEA was insufficient to cover office lease and support staff payments, NOA agents could increase the OEA available by reallocating one or two commission percentage points to OEA. As a result of these changes, there were multiple groups of captive agents and the NOA Program had multiple reimbursement arrangements. According to Allstate, but disputed by Plaintiffs, these modifications resulted in inefficiency and impaired its ability to make product and pricing changes. Moreover, Allstate contends, and Plaintiffs dispute, that the IRS Closing Agreement requirements hindered Allstate’s flexibility and ability to take advantage of opportunities in the marketplace. B. The Preparing for the Future Group Reorganization Program I. The Sales Organization of the Future Initiative The Sales Organization of the Future (“SOOF”) initiative was large in scope and used extensive Allstate resources from 1997 to 1998, including dozens of Allstate employees, some of whom worked full-time on the initiative. SOOF was a project led by outside consultant McKinsey & Company (“McKinsey”) to simplify procedures, take low-value-added activities out of the agents’ offices, and allow agents to sell more products. McKinsey was paid $525,000 per month in consulting fees. Nonetheless, the SOOF work was overseen by a high level “steering committee” that included certain of Allstate’s senior officers, including Edward Liddy, who was then Chief Operating Officer of Allstate. Among the other officers on the steering committee were Bob Gary, then President of Allstate’s Personal Property & Casualty business; Steve Groot, then Senior Vice President and President of Allstate Indemnity; Lou Lower, then President of Allstate Life Insurance; Frank Pollard, then Senior Vice President and Chief Information Officer; Rita Wilson, then Senior Vice President; and Tom Wilson, then Senior Vice President and Chief Financial Officer. As Allstate advised the IRS, Mr. Liddy chaired a SOOF “task force ... appointed to work directly on [the NOA classification] issues” in the course of “reviewing Allstate’s agent distribution system and ... recommending changes ... to best position Allstate for the future.” (Meehan Deck, Ex. 54, (“Allstate Insurance Company Pre-Submission for June 28, 1997 Meeting”), at ARI 180109.) By November 1997, Messrs. Liddy and Gary had reportedly spent approximately forty hours in working sessions with the SOOF team. Several proposals were offered by McKinsey, although the evidence is disputed as to whether Allstate ever considered such proposals. First, there was a suggestion to impose minimum performance standards, which would result in approximately 1500 agents unable to meet those standards. Second, the SOOF initiative included a separation allowance proposal to allow agents to voluntarily leave Allstate if they did not want to participate in changes. Neither of these proposals was adopted. One of the questions that the SOOF team discussed was whether agents should be employees or EA’s/independent contractors. The SOOF team recognized that Allstate could “not force conversion of reticent employee agents” and thus proposed a “[gjradual transition to EA ... through [ijncenting employee agents to convert and removing barriers.” (Meehan Deck, Ex. 134 (“SOOF Blueprint of Emerging Vision”), at ARI 210916, ARI 210931.) The draft document entitled “SOOF Emerging Blueprint,” created by McKinsey, stated that “[o]ur objective is to migrate existing agents to EA over a multi-year period.... We will not force conversion; rather we will make migration to EA as attractive as possible by removing barriers such as medical and retirement benefit options.” (Meehan Deck, Ex. 129 (“SOOF Emerging Blueprint November 1997”), at ARI 018587.) The draft document also noted that two-thirds of Allstate agents were employee agents, of which fifty percent were over fifty years old. A McKinsey-prepared document, entitled “Compensation Comparison Across Contracts,” revealed that, in comparing the R830/R1500 contracts versus the EA’s R3001 contract, conversion of all R830/R1500 agents to EAs would result in an Allstate savings of $90 million per year due to the elimination of employee benefits and entitlements. The same document recognized that the “best financial strategy” for an R830/ R1500 agent was “to remain an employee (earning higher revenue)” and then convert to an EA five years before retirement “to cash in on the book as well.” (Meehan Deck, Ex. 120 (“SOOF Compensation Comparison Across Contracts”), at AF061697.) The SOOF team projected, however, that if Allstate took no action to encourage the R830/R1500 agents to convert to EA’s or leave, it would take thirty-one years to remove R830 agents from the system and thirty-five years to remove R1500 agents from the system. McKinsey subsequently looked into how to provide incentives for conversion and to identify disincentives to voluntary conversion. To that end, McKinsey proposed various options. At no time prior to November 1999, however, did Allstate adopt any deadline for conversion or change the age/service requirements under the Pension Plan. Allstate contends that by November 1999, SOOF was never used in building any real program. It further asserts that SOOF was irrelevant to the November 1999 Program that is the subject of this litigation. 2. Background Behind the Preparing for the Future Program Effective January 1, 1999, Allstate had five captive agent programs operating pursuant to the following contracts: (1) R3001 contract; (2) R3000 contract; (3) R4614 Associate Agent contract; (4) R830 contract; and (5) R1500 contract. As noted previously, each of these programs had different compensation/commission structures, different OEA formulas, and different evaluation standards. Therefore, in June 1999, Allstate began evaluating whether changes could be made to consolidate its agency programs into a single program. Barry Hutton, an Assistant Vice President in Allstate’s Sales Department, was charged with spearheading this inquiry. Hutton’s team was initially called the Channel Integration Project and/or the Early Bird team. The members of the Channel Integration team included: Helen Brown, Regional Distribution Leader; James Dill, Home Office Counsel; George Giles, Human Resources; Carole Jassen, Senior Sales Manager; Dolores Jossund, Measurement Director, Distribution; Michael Rocen, Senior Sales Professional; and Dudley Bright, Director of Personal Lines Finance. In addition, the team received assistance from field representatives, including Mike Brown, Jim Brown, Brad Roeber, and Ken Schmidt. Because the team discussed highly sensitive topics and met frequently, the team worked at an off-site location. Members of the team signed a confidentiality and non-disclosure agreement. The team then reported, every one or two weeks, to a small group of Allstate officers that included Robert Gary, Phil Lawson, Rick Cohen, and Jeff Kaufman. The Channel Integration Team was assigned to investigate three broad topics: (1) whether Allstate should move to a single-contract agent program whereby all agents would operate under the same contract; (2) what Allstate could do to help underperforming agencies; and (3) how Allstate could better align agent compensation with company objectives. Mr. Hutton identified two possible designs, both of which involved forcing the conversion of employee agents to the R3001 contract. The parties dispute the reasoning and logic behind the merging of the various agency programs into one. Allstate claims that it was an effort to address the inefficiencies associated with changing all of Allstate’s existing programs to respond to fluid market conditions, the complexity associated with introducing and pricing of new insurance products, and the challenge of supporting an agency force comprised of both employees and independent contractors. Plaintiffs, however, argue that Allstate managed employee agents and exclusive agents in the same way and that Allstate suffered no additional complexities. The Hutton team selected the EA Program as the program of choice to which it would move all of its agents. Both parties agree that this Program was not impacted by the same IRS issues. Allstate, however, claims that this Program was its most successful and provided the agents with the most freedom. Plaintiffs, on the other hand, suggest that Allstate chose this Program because it significantly lowered the company’s costs by allowing it to have captive agents without either the office expense reimbursement or the costly employee benefits entitlements of its employee agents. By July 1999, the concept of a Release was included in one of the Channel Integration Team presentations entitled “Winning in the New Century,” and the concept of offering three options to employee agents was introduced. The presentation remarked that “[ejmployee agents cannot convert, sell BOB [books of business] or receive the Separation Plan without signing a release.” (Meehan Deck, Ex. 155 (“Winning in the New Century”), at ARI 000631.) On July 12-13, 1999, Allstate met with its Board of Directors to discuss, among other items, its strategy for employee agents. The discussion was led by Bob Gary, the President of Allstate Property and Casualty. Allstate set aside an hour and one-half with the Board to address its strategy for the agents. One of the slides presented at that meeting stated as follows: AGENCY TRANSITION Wish List ■ Agency Reduction in Force Based -» on Standards Realities ■ Not Legally Possible ■ Agents Ail on One Contract -* • Legal and Fairness Issues • Large Charge to Pension Fund • Reduce Agent Compensation -*■ • Difficult Move in View of All That is Coming Down (Meehan Decl., Ex. 151 (“Allstate Board of Directors Strategy Meeting”), at ARI 003317.) This same document advised Allstate’s Board that an agent reduction in force based on standards was not legally possible. No minutes were taken of the July 12-13, 1999 Allstate Board of Directors strategy meeting. In late September 1999, the Hutton team recommended to Richard Cohen, Allstate’s President, that Allstate discontinue its employee agency program and offer all employee agents the opportunity to become Exclusive Agents under an R3001 contract. In September and October 1999, Cohen and Edward Liddy had frequent discussions concerning the Hutton team’s recommendation. In late October, Liddy and Cohen made the decision to go forward with this recommendation. Allstate contends that this decision was necessary to effectively compete in the marketplace, whereas Plaintiffs believe that Allstate made this decision to strip the employee agents of their employee benefits, including pensions, and to rid itself of older employee agents. Ultimately, by late October 1999, the Hutton team moved forward with what became known as the Preparing for the Future Group Reorganization Program (the “Program”). In November 1999, Allstate formally adopted the Agent Transition Severance Plan (“ATSP”), which contained both non-compete and non-solicitation provisions that constituted eligibility requirements for participation in that Plan. 3. The Announcement of the Preparing for the Future Program On November 10, 1999, Allstate announced the Program by noting that as part of a “New Business Model” it was “reorganizing] its existing captive agency program to a single exclusive agency independent contractor program.” (Meehan Decl, Ex. 37 (“Nov. 10, 1999 Press Release”), at ARI 001257.) At the November 1999 scripted presentation to employee agents, Allstate represented that the Exclusive Agency program is the “premier program” and provides agents with more flexibility to grow their agencies and effectively manage their operations. (Id. at ARI 001264.) With few exceptions, Allstate terminated the employment contracts of the 6,200-plus R830 and R1500 employee agents effective no later than June 30, 2000. Those agents were not given job-in-jeopardy notices, were not offered the opportunity to have their termination reviewed by an Agent Review Board, and were not terminated based on any individual circumstances. While Allstate argues that the Program applied to all agents regardless of age, productivity, or performance, Plaintiffs contend that it adversely and disproportionately impacted older employees since, as agreed by the parties, approximately ninety percent of the R830/R1500 agents were over forty years of age. In connection with the termination of the R830 and R1500 employment contracts, Allstate offered the agents working under those contracts four options. The first three options were conditioned upon the agents’ agreement to execute a release of claims, while the fourth option did not. The first option was the “EA Option.” According to the Program Information Booklet, this option would allow the agent to enter into an R3001C or R3001S Agreement thereby converting the agent from an employee to an independent contractor. The agent would then be entitled to all of the benefits and requirements of that contract, including increased renewal commissions, plus a conversion bonus, earlier transferability in the agent’s book of business, debt forgiveness, and reimbursement for moving expenses if necessary. The agent was not permitted to take advantage of this option, however, without the signing of a release. The second option was the “Sale Option.” This option also permitted an agent to enter into R3001C/S Agreement with Allstate, thus converting the agent to an EA independent contractor. In turn, the agent would receive a “conversion bonus” and Allstate would forgive any advances owed, assume certain lease and advertising obligations incurred as an employee agent, and permit the agent, after thirty-days’ service as an EA, to sell his or her book of business written while an R830 or R1500 agent. Again, this option required the agent to sign a release. The third option was the “Enhanced Severance Option.” Under this option, Allstate would pay the agent “enhanced” severance equal to one year’s pay based on the better of 1997 or 1998 total compensation, forgive debt and/or expenses that Allstate had advanced to the agent, and relieve the agent of certain lease and advertising obligations incurred as an R830 or R1500 agent. Yet again, this option was not available unless the agent signed a release. The final option was the “Base Severance Option.” If an agent elected this option, then Allstate paid him or her up to thirteen weeks of pay. The agent electing this option did not need to enter into a release, although he/she was subject to certain additional non-compete and non-solicitation obligations. Notably, Allstate had determined that agents affected by the Program were ineligible for the existing severance or post-termination pay plans described above (the Allstate Severance Pay Plan and Allstate Service Allowance Plan) because they were not terminated for any of the reasons set forth in those Plans. Allstate also took the position that the pre-existing severance/post-termination pay Plans were inapplicable because they did not apply to group reorganization programs. 4. Program Information Provided After the Program Announcement Following the November 10, 1999 Program announcement, Allstate held meetings with agents on a regional basis to provide information about the Program. After the initial meetings, Allstate conducted additional regional and local meetings with' agents to further discuss the details of the Program. Although agents were not permitted to ask questions at the initial November meeting, Allstate managers took questions and provided answers at many of the subsequent regional meetings. In addition, Allstate provided each employee agent with a detailed package of written materials regarding the Program. Each package included a Program Information Booklet that explained the Program and the Program options, as well as a copy of the Release, copies of the R3001S and R3001C booklets explaining the impact of conversion on agent benefits and descriptions of the EA benefit plans, and other information. Each employee agent also received a personalized information worksheet estimating the amounts that the agents would receive under each of the options. Notably, the personalized information worksheets did not identify the amount each agent would receive in base severance if they did not sign the Release, nor did they identify any estimate of what an agent could or would receive from an Allstate-approved buyer for selling his or her book of business. Moreover, Allstate did not quantify the value of the benefits that employee agents were losing as a result of the conversion to the R3001 contract. Instead, the worksheet directed agents to perform this calculation on their own on a designated space on the form. Allstate also gave each employee agent an Informational Notice, dated November 16, 1999, that purported to explain the Release requirement for the EA Option, Sale Option, or Enhanced Severance Option. The Notice stated, in its entirety, the following: NOTICE REGARDING THE “PREPARING FOR THE FUTURE” GROUP REORGANIZATION PROGRAM FOR R830 AND R1500 AGENTS (THE “PROGRAM”) ELECTION FORM AND GENERAL RELEASE AND WAIVER AGREEMENT (“RELEASE”); EMPLOYMENT TERMINATION NOTICE, AND OTHER IMPORTANT INFORMATION Please note the following specific items, a.Each option chosen under the Program contains specific payments, benefits, limitations and requirements You should review carefully the “Preparing For the Future”— R830 and R1500 Agent Information Booklet For the Group Reorganization Program (“Program Information Booklet”) and all other information given to you in connection with the Program, including the Release and ADEA Waiver Information attached to this Notice, before you make our decision. Please note also in making your election that the Exclusive Agency program, like other Allstate programs, is subject to change in the future to meet future business needs. b. You have more than 45 days from the date of this Notice, or until June 1, 2000 (or in Delaware, December 1, 2000), to consider whether to accept one of the options available under the Program. c. If you elect an option under the Program and sign the Release, you will then have seven days after signing to change your mind and revoke the Release (15 days in Minnesota). d. Your employment as an Allstate Agent and your R830 Agent Compensation Agreement or R1500 Agent Employment Agreement shall terminate no later than the close of business on June 30, 2000 (or if in Delaware, no later than close of business on December 31, 2000).[] This constitutes any notice suggested or required pursuant to any federal, state, or local law. You may contact our Regional Human Resources Manager if you have any questions regarding this. Details regarding our ability to terminate your employment earlier under the Program are discussed in the Program Information Booklet and related materials. If you sign the Release, you will be waiving your rights to any claims or potential claims arising out of your employment, termination of employment or transition to independent contractor status which have been, or could be filed against Allstate, or its affiliates pursuant to any local, state or federal law. Therefore, we advise you to consult with an attorney before you elect one of the options available to you and release and waive any legal claims. As noted in the Program Information Booklet, in order to be eligible for the enhanced severance pay or other compensation or benefits available under the Program, except for base severance pay, you must submit the Release properly addressed and postmarked or received by Allstate no later than June 1, 2000 (or if in Delaware, December 1, 2000). If you wish to receive only base severance pay, under the terms of the Agent Transition Severance Plan you are not required to sign the Release, but you should submit instead the Base Severance Pay Election Form properly addressed and postmarked or received by Allstate no later than June 1, 2000 (or if in Delaware, December 1, 2000). Please mail or hand deliver the Release or Base Severance Pay Election Form to your Regional Human Resource Manager. Failure to submit either form by the deadline noted above shall be viewed as an election of the base severance pay option only. (Heinz Deck, Ex. 62 (“Informational Notice”) (emphasis in original).) From November 1999 through June 2000, agents could submit questions to their agency manager, then to their local HR manager, and finally to Allstate’s 800-number resolution line. Allstate identified between 500-600 agency managers and 13-14 local Human Resources managers as persons who would answer questions from employee agents about the Program. Agency managers were provided with uniform materials to answer questions and were instructed to stick to Allstate’s script. Allstate then provided R830 and R1500 agents with eleven sets of Questions and Answers regarding various aspects of the Program that were generated from agent inquiries. In total, there were more than 230 Questions and Answers provided to agents. 5. The Release As noted above, in connection with the announcement of the Program and the provision of the Informational Notice in November 1999, agents also received a copy of the Release. The Release was three-pages long, including a signature page. The Release and Waiver Provision stated: In return for the consideration that I am receiving under the Program, I hereby release, waive, and forever discharge Allstate Insurance Company, its agents, parent, subsidiaries, affiliates, employees, officers, shareholders, successors, assigns, benefits plans, plan administrators, representatives, trustees and plan agents (“Allstate”), from any and all liability, actions, charges, causes of action, demands, damages, entitlements or claims for relief or remuneration of any kind whatsoever, whether known or unknown, or whether previously asserted or unasserted, stated or unstated, arising out of, connected with, or related to, my employment and/or the termination of my employment and my R830 or R1500 Agent Agreement with Allstate, or my transition to independent contractor status, including, but not limited to, all matters in law, in equity, in contract, or in tort, or pursuant to statute, including any claim for age or other types of discrimination prohibited under the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Employee Retirement Income Security Act (“ERISA”), the Illinois Human Rights Act, and the West Virginia Human Rights Act as those acts have been amended, or any other federal, state, or local law or ordinance or the common law. I further agree that if any claim is made in my behalf with respect to any matter released and waived above, I hereby waive any rights I may have with respect thereto and agree not to take any payments or other benefits from such claim. I understand that this release and waiver does not apply to any future claims that may arise after I sign this Release or to any benefits to which I am entitled in accordance with any Allstate plan subject to ERISA by virtue of my employment with Allstate prior to my employment termination date. (Heinz Deck, Ex. 186 (“Release”), at ARI 004101.) The next section of the Release states: I acknowledge that: (a) I have read this Release, and I understand its legal and binding effect. I am acting voluntarily and of my own free will in executing this Release. (b) I have had the opportunity to seek, and I was advised in writing to seek the advice of an attorney prior to signing this Release.... (c) I was given at least 45 days to consider the terms of the Program, including this Release, before signing it. I understand that I may make an election under the Program before forty-five (45) days, but I am under no obligation to do so. (d) If I am a Minnesota, California, North Dakota, or South Dakota agent or resident, I acknowledge that I have reviewed the disclosures and agree to such statements relevant to me as discussed below. (Id.) The Release then goes on to provide information regarding the right to revoke or rescind, as follows: I understand that if I sign this Release, I can change my mind and revoke it within seven days after signing it. I understand that the Release and Waiver set forth in the first paragraph and the consideration available under the Program above will not be effective until after this seven-day period has expired .... I understand that a decision to revoke or rescind within such period should be submitted in writing to my Human Resource Manager. If I do not revoke within the seven-day period discussed above ..., then the Release will become fully effective. (Id.) The Release further requires the signer to acknowledge receipt of information about the Program: On the date that I received a copy of this Release, I also received a copy of the Program Information Booklet, and other written information which includes a description of: (a) the group of Agents covered by the Program, the eligibility factors of the Program, and any time limits and conditions applicable to the Program and method used in arriving at the amount of consideration offered; and (b) the job titles and ages of all individuals eligible and selected for the Program, and the ages of all individuals in the same job classification, who are not eligible and not selected for the Program. (Id. at ARI 004102.) Finally, following some state-specific announcements, the Release provides an Election of Option and Signature section: Election of Option and Acceptance of Release and Waiver I have read and understand the Release, as well as the materials describing the Program, including the Program Information Booklet. I voluntarily make the following election (choose one): I understand that my employment as an Allstate Agent and R830 and R1500 Agent Agreement will terminate on or before June 30, 2000 (or if in Delaware, December 31, 2000). I accept the Program and agree to be bound by its terms and the terms of this Release, including the Release and Waiver set forth above by choosing one of the following options: ... [list of options described above] (Id. at ARI 004103.) Allstate’s corporate designee, Mr. Hutton, conceded that without the Release, Allstate would not have moved forward with the Preparing for the Future Program. The Release was drafted by Allstate and the terms were completely nonnegotiable. Allstate further made clear that it would not accept any signed Releases that were marked up in any way, either with language crossed our or additional terms or notes added to the Release by hand. Indeed, Plaintiffs Romero, Kelly, T. Kearney, and Wiktor submitted Releases to their managers with modifications and Allstate declined to accept them. 6. The OWBPA Disclosure Also in November 1999, Allstate provided its agents with a written document entitled “Age Discrimination in Employment CADEA) Waiver Information.” This document was issued in an effort by Allstate to comply with the requirement of the Older Workers Benefit Protection Act (“OWBPA”), 29 U.S.C. § 626(f)(1)(H), that employers seeking a release of ADEA claims as part of an employment termination program provide the employees with the job titles and ages of those selected, and those that are not selected, for the program. Under that statute, the list of individuals not eligible or selected for the program must include only individuals “in the same job classification or organization unit” as those employees who are eligible or selected for the program. Id. Allstate’s document stated: All Allstate R830 and R1500 Agents are eligible for the options described in the “Preparing For The Future” — R830 and R1500 Agent Information Booklet For the Group Reorganization Program (“Program Information Booklet”), except Montana and New Jersey Agents who will be covered in separate programs with different options available to them. Please consult the Program Information Booklet for more detailed information about the Program. (Heinz Deck, Ex. 74 (“Age Discrimination in Employment Waiver Information”), at ARI 003839.) The document went on to list, by contract, the number of agents from each age that were eligible and selected for the Program and the number of agents from each age that were not-eligible and not selected for the Program. The document remarked that nine R830 and eleven R1500 agents from Montana were not selected for the Program, and that 175 R830 agents from New Jersey were not selected for the Program. The document did not disclose (a) that R830 and R1500 employee agents in West Virginia hired on or after June 8,1984 were “not eligible and not selected” for the Program; (b) that at least four R830 employee agents from other states did not have their contracts terminated; (c) and that Allstate’s associate and R3000 agents were “not eligible and not selected” for the Program. Moreover, in February 2000, subsequent to the issuance of this document, Montana agents, who were listed on the original document as “not eligible and not selected,” became eligible and selected for the Program. Only the Montana R830 and R1500 agents received an updated February 2000 OWB-PA disclosure listing them as “eligible and selected.” Ultimately, the document indicates that 6,526 agents were made eligible and selected for the Program. 7. State-Specific Issues a.New Jersey As of October 1999, the average age of the R830 agents employed by Allstate New Jersey was fifty-nine years old. Allstate determined that New Jersey employee agents in the Program were ineligible for inclusion in the Program because (1) they were employed by Allstate New Jersey Insurance Company, a separate company under a different management structure and compensation system than the rest of the employee agents in the United States and (2) New Jersey had unique state insurance withdrawal laws, which could have been triggered in the event of a decrease in the number of agencies in New Jersey. b.Montana Allstate considered Montana agents for the Program and listed them as not eligible and not selected on the OWBPA disclosure. Allstate avers that it listed them as ineligible on the November 16, 1999 disclosure because of certain unidentified Montana state laws. By February 2000, however, Allstate ultimately determined that Montana agents were eligible for the Program. On February 15, 2000, Allstate included Montana agents in the Program and distributed the Program materials with an updated disclosure to the Montana agents. The Montana-specific version of the Preparing for the Future Information Booklet informed Montana agents that they had until September 1, 2000 to consider whether to accept one of the Options available under the Program and that their contracts would be terminated no later than September 30, 2000. Thereafter, Montana agents were moved to the eligible category in the revised ADEA Waiver Information distributed only to Montana agents. c.West Virginia West Virginia employees who entered into their Allstate contracts on or after June 8, 1984 could not be terminated as part of the Program. Allstate nonetheless included them as eligible because each of them was, according to Allstate, offered consideration in exchange for entering into the Release. In turn, it included the ages of West Virginia employee agents hired on or after June 8, 1984 in the list of eligible agents on the OWBPA disclosure. d.Delaware Under a Delaware statute requiring twelve month