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Who’s an Employee?

California court rules nonexclusive agent is independent contractor

By Barry Zalma | Updated on March 27, 2012

Kimbly Arnold, by contract with Mutual of Omaha, sold Mutual products as a nonexclusive agent and also sold insurance products for other insurers. She was unhappy with the relationship with Mutual, terminated the contract, and then sued for benefits. In Kimbly Arnold v. Mutual of Omaha Insurance Co., No. A131440 (Cal.App. Dist.1 12/30/2011), Arnold claimed unpaid employee entitlements under the California Labor Code. Summary judgment was granted in favor of Mutual because the facts established she was not an employee, but rather an independent contractor. Seeking serious profits from the suit, Arnold also filed as the representative plaintiff of a class.

The complaint listed three causes of action. Mutual allegedly failed to fully reimburse Arnold and class members for “necessary business-related expenses and costs,” to which they were entitled under the California Labor Code. The second cause of action alleged Mutual had willfully failed to pay Arnold and class members for wages earned but unpaid prior to being discharged from employment or prior to quitting employment, for which they were entitled to recover under multiple labor codes. A third cause of action alleged Mutual’s conduct constituted an unlawful business practice in violation of the unfair competition law, for which Arnold and class members sought compensation, an injunction requiring Mutual to pay all outstanding wages and costs.

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