Insurance Agent for Northwestern Mutual Found to be Independent Contractor, Not Employee

In a very favorable ruling for insurance companies, a federal district court on May 6 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…

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