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Insurance Agent For Northwestern Mutual Found To Be Independent Contractor, Not Employee
This article discusses a favorable ruling for insurance companies on the issue of independent contractor misclassification. The court held that Northwestern…
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This article discusses a favorable ruling for insurance companies on the issue of independent contractor misclassification. The court held that Northwestern Mutual Life Insurance Company had not misclassified as an independent contractor a life insurance agent who alleged that he was an “employee” under the New Jersey Wage Payment Law.
In a very favorable ruling for insurance companies, a federal district court recently held that Northwestern Mutual Life Insurance Company had not misclassified as an independent contractor (“IC”) a life insurance agent who alleged that he was an “employee” under the New Jersey Wage Payment Law. This decision comes soon after another favorable ruling for insurance companies in a case closely watched by the entire industry—an opinion by the U.S. Court of Appeals for the Sixth Circuit holding that agents for American Family Insurance were ICs and not employees under ERISA. This decision may be more meaningful than the American Family case because the test for IC status under ERISA is far less challenging for companies to meet than the test for IC status under the New Jersey Wage Payment Law. On the other hand, the evidence in this Northwestern Mutual case was far stronger for IC status than was the evidence in the American Family case. Thus, while insurance companies should gain comfort from this new decision, the risk of a game-changing decision adversely affecting another carrier cannot be ignored. There is, however, a great deal that companies in this industry and other business sectors can do to shore up their IC compliance in the meantime, as discussed at the last section of this article.
The Facts
For about 15 years, the plaintiff, Fred Walfish, was a Northwestern Mutual financial representative, but in 2010 he entered into a new relationship with a general agency owned and operated by a general agent, Robert Seery, doing business as the Seery Agency. From 2010 on, the plaintiff sold insurance under a contract with the Seery Agency and filed taxes as a sole proprietorship called Fred Walfish Insurance. During that time, he sold both Northwestern Mutual policies as well as the policies of about 20 other companies to his clients. Walfish received no more than one-third of his overall commissions from Northwestern products.
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Woman Caught STD in Car, Auto Insurance to Pay Out $5.2 Million
The Missouri woman sued Geico claiming that she contracted a sexually transmitted disease from the car owner after the two had sex inside a car covered by the insurer.
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