Court Denies Defendant’s Attempt to Dismiss Nationwide Class Action Alleging Insurance Agents were Wrongfully Denied Benefits
On August 9, 2013, Wexler Wallace LLP and its co-counsel—Hansen Reynolds Dickinson Crueger, the Law Office of Greg Coleman, and Landskroner Grieco Merriman—achieved a victory for Plaintiffs in a nationwide class action against American Family Insurance when Judge Donald C. Nugent of the United States District Court for the Northern District of Ohio denied Defendant American Family Insurance’s motion to dismiss in its entirety, allowing Plaintiffs to pursue their claims under the Employment Retirement Income Security Act (ERISA). The Complaint alleges that American Family improperly classifies its agents as independent contractors but treats them as employees, maintaining ownership over their books of business, requiring them to sell only American Family insurance and follow American Family’s policies and procedures, and controlling important aspects of their businesses, from the hours they keep to the staff they hire.
Noting a trend in which “insurance companies have been continuously tightening their control over their agents while continuing to disavow them as employees,” Judge Nugent concluded that, “[i]f this trend continues, there will come a point when simply labeling the agents as ‘independent contractors’ and refusing to provide the benefits employees are entitled to will no longer outweigh the degree of control exercised by the insurance companies.” Today’s decision paves the way for the Court to decide if this is “the case that tips the scales on that front.”
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