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Allstate Acknowledges Scientology Training Program Was A Blunder

March 23, 1995

NORTHBROOK, Ill. (AP) _ He was a dynamic, results-oriented management consultant who urged rewarding productive employees and punishing laggards. That sounded good in 1989 when Allstate Corp. brought in Donald Pearson.

Six years later, Allstate says it ``dropped the ball″ by allowing Pearson to teach certain doctrines derived from the Church of Scientology, a Los Angeles-based, religious-scientific group. Known for its aggressive recruiting methods, the church is often described by critics as a cult.

The big insurance company based in suburban Chicago is also beset by lawsuits and Equal Employment Opportunity Commission complaints from more than two dozen agents, many alleging wrongful discharge.

``We should have managed that part of it better and didn’t,″ Allstate spokesman Al Orendorff said Wednesday.

Orendorff denied allegations that some employees were hounded, intimidated and wrongfully fired as a result of a training program taught by Pearson in a series of seminars from 1989 to 1993.

More than 3,500 employees took part in the program in which ethical considerations at times took a back seat to getting results and building productivity, according to the Wall Street Journal, which broke the story Tuesday.

Orendorff said that element of the training ``was wholly unacceptable and inconsistent with our standards.″

The Journal said Pearson was a top trainer for International Executive Technology Inc., a firm devoted to teaching L. Ron Hubbard’s management principles.

The principles included rewarding without fail the most productive employees and penalizing the least productive, the Journal said, citing training materials.

Pearson also was a Scientologist, the Journal said.

Knowledge of Pearson’s Scientology connection spread through the Northbrook-based insurance company along with complaints of intimidation and harassment. The newspaper said that prompted company officials to drop Pearson’s services by 1993.

Orendorff said that while there had been problems as a result of the training, parts of it were valuable.

He said the lawsuits and complaints filed by agents reflected their failure to prosper under a more entrepreneurial system established by Allstate in the mid-1980s.

The Church of Scientology responded to the report by saying the report represented a ``controversy being created by what appears to be a few disgruntled employees of a huge corporation.″

It called Hubbard’s management approach a proven method for clarifying business goals and increasing efficiency and productivity.

Allstate is 80 percent owned by Sears, Roebuck and Co. Sears once owned Allstate in its entirety but sold 20 percent of the company to the public in 1993. Sears shareholders are scheduled to vote March 31 on a plan to spin off the rest of the company later this year.

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