Court Won't Reconsider Ruling on Insurance Agents' Contractor Status

Thursday, March 28, 2019 | 0

The U.S. Court of Appeals for the 6th Circuit has let stand its January ruling, which found that American Family Insurance Co. did not misclassify some 7,000 current and former insurance agents as independent contractors in order to avoid paying benefits.

In Jammal v. American Family Insurance Co., the court held that the insurance company, which provides workers' compensation coverage for hundreds of employers around the country, did not violate the federal Employee Retirement Income Security Act. The ruling reversed a decision by the federal district court in Cleveland.

This week, the 6th Circuit declined to reconsider its January decision.

The case has been closely watched by insurance companies that follow similar business models. The opinion is the most recent ruling in favor of American Family on the independent contractor issue, but it applies only to the ERISA statue and does not make a determination on contractor status as defined by other federal and state laws, including workers' comp statutes, according to legal industry news reports.

The case is similar to a class action lawsuit filed this month in Illinois by State Farm insurance agents, who argue that they were misclassified as independent contractors.