The National Law Journal reports the suit was filed on June 25 in federal court in San Diego on behalf of all sales and financial representatives at Northwestern Mutual who allegedly were denied overtime compensation. Jeremy Heisler, a partner at Washington, D.C.-based Sanford Wittels & Heisler said: “Northwestern thinks you can get around the minimum wage and overtime laws simply by classifying them as independent contractors, when these people have very little freedom to do anything.”
Two of the plaintiffs worked in Northwestern Mutual offices in California, and their claims, filed on behalf of more than 100 representatives in California who worked for Northwestern Mutual during the past four years, include alleged state labor violations and unlawful activity under the California Business and Professions Code. They requested certification of a class of representatives and former representatives of Northwestern Mutual whose unpaid damages amount to $100 million under state law and $100 million under federal law, according to the news report.
Both said they were forced to work more than 40 hours per week but were paid less than California’s minimum wage, which was $8 per hour as of January 2008.
One of the California plaintiffs and a third plaintiff who worked at Northwestern Mutual’s offices in Atlanta and Charlotte, North Carolina, from 2001 to 2007 are suing under the federal Fair Labor Standards Act on behalf of hundreds of representatives who worked at Northwestern Mutual during the past three years. They allege that Northwestern Mutual consistently misclassified its sales and financial representatives as “independent contractors,” rather than employees, to avoid paying them overtime under federal and state laws.
The suit alleges that sales and financial representatives at Northwestern Mutual are not independent contractors, in part because they must obtain management approval before making major decisions. Additionally, it says that they are expected to work from 7:30 a.m. to 5:30 p.m. or later under a new internal agreement that mandates a work day of at least 10 hours per day for five or six days each week.
The National Law Journal said that in January 2008, a federal judge in Pennsylvania threw out a similar suit on a summary judgment motion because the plaintiff could not establish that he was an employee of Northwestern Mutual.
The case is Lint v. Northwestern Mutual Life Insurance Co., No. 09-cv-1373 (S.D. Calif.).
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