Judge rules American Family Insurance agents are employees, not independent contractors

Posted on: August 4th, 2017 by Steve Larson

A federal judge in Ohio ruled that a certified class of nearly 7,000 insurance agents were misclassified as independent contractors by American Family Insurance Co. and are in fact employees under the Employee Retirement Income Security Act. The Judge found the company exerted a level of control like that of an employer.

The ruling followed a 12-day bench trial. The judge then stayed the case and authorized the insurer to file an interlocutory appeal, saying it could materially advance the ultimate termination of the litigation. The judge said an immediate appeal was warranted because there was evidence supporting both sides in this case, assessing damages will be “unusually complicated,” the ruling could have far-reaching implications, and prior case law “has been nearly unanimous” in finding that insurance agents are generally supposed to be classified as independent contractors.

The case is Walid Jammal et al. v. American Family Insurance Co. et al., case number 1:13-cv-00437, in the U.S. District Court for the Northern District of Ohio.