From the Journal Sentintel, Paul Gores reports that American Family is appealing a ruling that agents were employees and not independent contractors (see Insurance Agents as Employees? Court Breaks Independent Contractor Precedent). Paul writes:
American Family sought the appeal following an Aug. 1 ruling by U.S. District Court Judge Donald Nugent of the Northern District of Ohio.Nugent concurred with an advisory jury ruling that the preponderance of evidence shows agents really are employees of the company, even if they had entered into an agreement that said they weren’t. Nugent stated that “the degree of control managers were encouraged to exercise was inconsistent with independent contractor status and was more in line with the level of control a manager would be expected to exert over an employee.”
But the company contends American Family agents are independent business owners, “solely responsible for the manner and means by which they run their agencies and sell insurance.”
American Family said the agents are paid through commission sales, set their office hours, pay and direct their own staff, and create and execute their own business plans. They declare themselves as self-employed independent contractors with the IRS and take tax deductions for their business expenses, American Family said.
The lawsuit, originally filed in 2013 by four former agents, was certified as a class action, automatically adding approximately 7,000 former and current American Family agents as unnamed plaintiffs.
Read the full story at American Family granted appeal in case over agents’ employment status