JUDGE CERTIFIES CLASS ACTION United States District Court
Judge Donald C. Nugent, (for the Northern District of Ohio Eastern
Division) on 3/2/2016, certified the Class Action case of Walid Jammal
(Plaintiffs) v American Family Insurance Group. (Defendants).
Plaintiffs filed this class action on February 28, 2013 against
American Family Insurance Company alleging that American Family
improperly classifies its agents as independent contractors when
actually they are employees because of the amount of control the company
maintains over nearly every aspect of the agents' business
operations. 3/3/2016The Second
Amended Complaint alleges that Defendants attempted to avoid compliance
with the
requirements of the Employee Retirement Income Security Act ("ERISA") by
mislabeling
its sales people as "independent contractors" while treating them for all
practical
purposes as
employees. The Complaint alleges that Plaintiffs were all "employees" as
defined
by ERISA,
and as employees, were denied the benefits they were entitled to under Defendants'
("American
Family") ERISA governed insurance and retirement plans. (ECF # 67). According
to the
Complaint, the Plaintiffs in this case were all insurance agents hired by
American Family
to sell the
company's insurance products (including home, auto, life, umbrella, business,
health,
and farm and
ranch insurance policies) and retirement products.1 (ECF #67, ¶ 3). Defendants
allegedly
promised Plaintiffs that they would be treated as "independent contractors,"
but
Case:
1:13-cv-00437-DCN Doc #: 137 Filed: 03/02/16 2 of 13. PageID #: 12478
instead
retained the right to exercise control over the manner and means by which they
conducted
every material aspect of their business. (ECF #67, ¶ 4, 5). For example, the
Complaint
alleges that American Family owns the agents' books of business; requires its
agents
to sell
exclusively American Family products; controls the office hours and locations
of the
agents;
controls hiring and firing of office staff; controls the conduct of the agents
and their staff
in the
office; controls advertising, signage, compensation, production requirements,
and policy
holder
information; and provides and monitors agents and their staff's use of computer
hardware
and
software. (ECF #67, ¶ 6). The agents are hired for an unlimited period of time,
in an "atwill"
relationship
wherein both American Family and the agents have the ability to terminate the
relationship
at any time, for any or no reason. (ECF #67, ¶ 7).
American
Family offers the agents "Termination Benefits" which provide agents with
death and
pension benefits using a formula based on years of service and the number of
in-force
policies
sold by the agent over time. (ECF #21, ¶ 8). American Family does not recognize
the
Termination
Benefits as an ERISA benefit plan, and allegedly often terminates agents before
these
offered benefits actually vest. (ECF #21, ¶ 10).
Plaintiffs
claim that they qualify as employees under ERICA and that American Family
misclassified
them as independent contractors. As a result they allege that they did not
receive
benefits they
would have been due under ERISA, including retirement benefits and health,
life,
disability
and dental plans paid to properly classified employees at the company.
