Allstate Agents Accuse Sears of Racketeering : Courts: Lawsuit seeks hundreds of millions in operating costs, says false promises were made.

Sears, Roebuck & Co. has been sued by its own Allstate Insurance Co. agents, who are demanding that Sears pay hundreds of millions of dollars in operating expenses.

More than 100 Allstate Insurance Co. agents said Sears recruited them with promises that the company would pay for office rent, claims processing, computers and other operating expenses.

Instead, the company passed those bills on to the agents, who were primarily former staff agents recruited as outside agents, the suit alleges.

The agents were affected by a 1983 shift in Allstate strategy under which longtime agents were enticed into setting up their own shops, according to the suit filed by 10 agents in Manhattan federal court. Since the complaint was filed last week, more than 100 agents have asked to join the racketeering lawsuit, said Daryl Hudson III, an attorney for the agents.

While the Neighborhood Office Agent program seemingly offered staff workers a golden opportunity, Sears was trying to push longtime workers out the door, the suit alleges. At the same time, Sears tried to make them pay operating expenses by treating the former workers as contract workers, the suit says.

The agents are seeking class-action status for about 15,000 people who have become outside Allstate agents since 1983.

Sears “did not care whether the NOA agents succeeded or failed; it only cared that the agents unknowingly take over overhead expenses and that they increase the number of policies in force, for the sake of appearances,” the agents said in the suit.

Sears spokesman Perry Chlan said the company hadn’t yet reviewed the suit and couldn’t comment.

Sears is planning to bring a $2-billion public offering of a 20% stake in Allstate to market in June.

Many of the agents were recruited as part of Allstate’s NOA program to reduce Allstate’s operating costs, according to the suit. Before the marketing change, Allstate agents primarily worked out of Sears stores or Allstate-operated offices, the suit says.

Under the new program, Allstate “was cynically manipulated and used by Sears to deliberately cause the financial ruin” of agents who “were on the verge of claiming substantial retirement benefits” had they stayed on as regular Allstate workers, the suit contends.