This class action is another case where a company has classified a worker as an independent contractor rather than an employee. However, in this case plaintiffs Jason Sheldon and Steven Hunsberger had to invest a significant amount of money. The plaintiffs were led to believe that they were starting their own businesses, but the complaint alleges that State Farm controlled nearly everything and provided a great deal of misinformation.
The class for this action is all individuals who signed the State Farm Term Independent Contractor Agent (TICA) Agreement, in the US, and were TICAs, during the class period. The class period has not been specifically defined.
According to the complaint, Sheldon and Hunsberger were recruited by State Farm as “agent interns” with the understanding that they were to open their own insurance agencies. The agent intern program included a course that they were told would give them the skills to run such a business.
As part of it, they were required to submit a business plan. Since they did not know where their offices would be and did not know what to expect, their State Farm trainers gave them the figures to put into the plan, saying that they would be allowed to change them later. Both plans were approved by State Farm, leading the men to think that the figures were appropriate and not inflated.
At the end of the training, each was told the area where he was to rent a property for his office. In fact, they were held to the figures in the plans, even though they eventually found they were higher than other agencies in the area. Both were told to increase their advertising, at their own expense, to try to meet the figures. Neither business lasted very long, even though both men invested tens of thousands of dollars of their own money.
The complaint claims that the men were given false or misleading information in terms of how much business they could expect to do, what they could expect to earn, how many similar agents were successful, and so on.
In the meantime, State Farm controlled every aspect of their businesses. For example, they were only permitted to sell State Farm products; State Farm told them where to rent offices; it required them to use certain computer hardware and software; and it regulated the in-house behavior for everyone who worked in their offices.
The complaint claims that State Farm has committed fraud and deceit and asks that the plaintiffs be credited for benefits they would have received as employees. These include a retirement plan, a 401(k) plan, and a pension plan.