Skip to content Skip to navigation

Aflac Misclassified Workers and Manipulated Figures, Says Securities Class Action

Share
Aflac Duck Head

Aflac Incorporated’s public statements included assurances about ethics, the excellent treatment of employees, and even a homey little recollection of someone’s mother’s “persistent wisdom” about looking out for others. But the complaint alleges that in reality the company was acting very differently, making its statements violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and leading to stock losses when the truth came out.

The class for this action is all persons and entities who acquired Aflac common stock from February 27, 2013 through January 11, 2018.

Aflac provides insurance policies that supplement traditional health insurance, including plans for accidents, cancer, critical illness and care, hospitalization, dental or vision care, life, and short-term disability. Aflac is a Fortune 500 company serving more than 50 million people in the fifty US states, certain US territories, and Japan.

The complaint quotes many of Aflac’s public statements during the class period, including SEC filings and Corporate Citizenship and Social Responsibility Reports. These statements claimed a workforce that included over 70,000 independent-contractor salespeople, touted their incentives, and bragged about inclusion on lists of World’s Most Ethical Companies and Best Companies to Work For.

Other statements emphasized care for workers:

  • “[I]f you take care of the employees, they will take care of the business.”
  • The book The Aflac Way “details the type of ethical behavior that is expected of an Aflac employee, reinforcing our culture and ensuring that our employees understand that ethics are non-negotiable.”
  • “We take care of our employees and independent agents… We offer excellent benefits, competitive salaries, award-winning training, advancement opportunities, on-site childcare, college scholarships, appreciation events and service awards.”
  • “At Aflac, the secret sauce has always been in the way we treat people who keep the business going.”
  • “My mother’s persistent wisdom: People have a responsibility to look out for one another.”

However, the complaint claims that these statements are misleading and fail to disclose a number of important facts:

  • The company hired sales associates with false promises of high compensation and work-life balance that they knew to be untrue.
  • It misclassified sales employees as independent contractors to save money, but maintained control over them as if they were employees.
  • It manipulated certain measures to simulate growth.
  • It violated its own Code of Conduct and standards of responsibility.

On January 11, 2018, The Intercept published a report that revealed previously undisclosed lawsuits against the company alleging exploitation of workers, manipulation of accounting, and insider trading. At the news, the company’s stock fell by more than 7%.

Article Type: 
Topic: 

Free Case Evaluation

Fill out the information for a FREE and prompt case evaluation.

About you

Additional Information

Latest Tweets

Join Us on Facebook