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Allstate Says Scientology Training Was Mistake

March 23, 1995

NORTHBROOK, Ill. (AP) _ Allstate Corp. acknowledged Wednesday that it hired a consultant who taught ``unacceptable″ Church of Scientology management principles to the insurance company’s agents and supervisors from 1988 to 1992.

The company denied allegations that some employees were hounded, intimidated and wrongfully fired as a result of the training program.

Scientology is a religious-scientific movement founded in the 1950s by the author L. Ron Hubbard that recruits new members aggressively. Critics call it a cult.

More than 3,500 Allstate workers participated in seminars that taught them to disregard ethics in the quest for greater productivity, The Wall Street Journal reported Tuesday.

That component of the training ``was wholly unacceptable and inconsistent with our standards,″ Allstate spokesman Al Orendorff said.

``We dropped the ball,″ he said. ``We should have managed that part of it better and didn’t.″

He said some other aspects of the training were valuable.

More than two dozen agents have filed lawsuits or Equal Employment Opportunity Commission complaints alleging fraud, harassment or discrimination by Allstate, often in connection with wrongful-discharge claims, the Journal reported.

Orendorff denied the allegations. The company told the Journal that the agents’ claims reflect their failure to prosper under the more entrepreneurial system Allstate set up in the mid-1980s.

After that restructuring, some California agents, seeking guidance in business management, hired a consultant in 1988 named Donald Pearson who was a Scientologist, the Journal reported.

According to the Journal, Pearson was a top trainer for International Executive Technology Inc., a firm devoted to teaching Hubbard’s management principles. The principles include rewarding without question the most productive workers and unfailingly penalizing the least productive, the Journal reported, citing training materials.

Pearson’s renown and influence spread rapidly within the Allstate organization, and he was hired in 1989 to present seminars to company managers across the nation, the Journal reported.

Word of his Scientology connection and complaints of intimidation and harassment also spread through the organization, prompting the company to drop Pearson’s services by 1993, the Journal reported.

The Church of Scientology, based in Los Angeles, said the Journal story was the result of a ``controversy being created by what appears to be a few disgruntled employees of a huge corporation.″

It said the Hubbard management technology is a proven method for clarifying business goals and increasing efficiency and productivity that is used in more than 40 countries.

Allstate, based in the Chicago suburb of Northbrook, is 80 percent owned by Sears, Roebuck and Co. Sears, which once owned all of Allstate, sold a 20 percent stake to the public in 1993. Sears shareholders are scheduled to vote March 31 on a plan to spin off the rest of the company in mid-1995.

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