On July 11, 2013, in Beaumont-Jacques v. Farmers Group, et al. (No. B239855), the Second District Court of Appeal concluded, as a matter of law, that plaintiff was properly classified as an independent contractor of an insurance company, even though the company provided input regarding the “quality and direction of her efforts.”
Plaintiff was a “district manager” for a group of five affiliated defendant insurers pursuant to a District Manager Appointment Agreement (Agreement). She recruited and recommended persons to become defendants’ agents. If candidates were accepted, she trained and “motivated” the agents to market only defendants’ insurance products. She did not sell the products, but the Agreement forbade her from representing other insurers. After voluntarily terminating her relationship with defendants in October 2009, plaintiff sued defendants for breach of contract, breach of the implied covenant, sex discrimination and Business and Professions Code section 17200 violations, each of which was dependent upon plaintiff’s purported status as an “employee.” The Court upheld the trial court’s order granting defendants’ summary judgment motion on the basis that plaintiff was an independent contractor.
The Court reasoned the pivotal inquiry is whether the principal has the right to control the manner and means of accomplishing the result desired. An owner may retain broad general power of supervision and control as to the results of the work to insure satisfactory performance, without losing independent contractor status. Plaintiff exercised “meaningful discretion” in many aspects of her duties under the Agreement – recruiting and training agents, including the time and locations she would do so, and the persons she would approach; determining her day-to-day hours, including breaks and vacations; hiring and supervising her staff and remitting payroll taxes for them as employees; paying for her costs such as marketing, office lease, telephone service and office supplies; and deducting those costs as business expenses, and identifying herself as self-employed, in her personal tax returns.
Plaintiff argued that defendants established “goals and objectives” regarding sales of their products, and that plaintiff was required to conform to defendants’ “regulations, operating principles and standards” and in engage in “normal good business practice.” However, the Court did not believe defendants retained “consequential authority” to control the manner by which results were to be achieved.
Therefore, Beaumont-Jacques demonstrates that even though an employer exercises control over goals, a crucial question in the determination of the independent contractor status, is whether an individual has “control over the details” in achieving those goals.
This document is intended to provide you with information about employment law related developments. The contents of this document are not intended to provide specific legal advice. This communication may be considered advertising in some jurisdictions.