Farmers
State Office – Colorado
Attn: James Purcell – State Executive
PO Box 37107
Denver, CO 80237
August 1, 2007
Dear Mr.
Purcell,
This
letter is in response to your July 2, 2007
email to the Colorado "District Leaders"
concerning your planned "one on one"
meetings with every agent who writes less
than ten auto policies per month.
Your
email says you will "have some tough
decisions to make on many of these agents"
and "it’s very hard to help someone who is
unwilling to take the necessary steps to
improve their performance."
Let me
help your decision making process by
directing your attention to the Agent
Appointment Agreement (AAA), which states,
“Nothing contained herein is intended or
shall be construed to create the
relationship of employer and employee;
rather, the Agent is an independent
contractor for all purposes.” It goes on to
state, “The time to be expended by the Agent
is solely within the Agent’s discretion, and
the persons to be solicited and the area
wherein solicitation shall be conducted is
at the election of the Agent.” And, “The
Agent shall, as an independent contractor,
exercise sole right to determine the time,
place and manner in which the objectives of
this Agreement are carried out, provided
only that the Agent conform to normal good
business practices, and to all State and
Federal laws governing the conduct of the
Companies and their Agents.”
UFAA is
confident that any court of competent
jurisdiction would conclude your threat to
take some action against agents not
producing some specific number of policies
constituted the imposition of a quota. That
action would represent a breach of the AAA
because, according to the AAA, “No change,
alteration or modification of this Agreement
may be made unless it is in writing and
signed by the Agent and an authorized
representative of the Companies.”
Furthermore, I seriously doubt that Home
Office authorized or even has knowledge of
your attempt to establish quotas, as that
would lend substantial weight to the belief
that agents are really employees rather than
independent contractors, something that
Farmers Group Inc. has constantly fought
since the first hearing before the National
Labor Relations Board in the 1960s. For
that reason, a copy of this letter is being
forward to Home Office Legal, to the
attention of Jason Katz.
Your
email said, "That is their choice but we all
need to understand each one of us will have
consequences based on the choices we make."
I do believe that statement is true and, in
this case, applies to you. Are you prepared
to live with the consequences of your
actions?
UFAA
will be watching closely to see how agents
who produce less than ten auto policies in
October are treated.
Ralph
Buchanan
Director of Legal Activities
United Farmers Agents Association
Cc:
Jason Katz Home Office - Legal
