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Farmers Insurance Agent Misclassification Lawsuit Settlement

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December 2, 2022

Milberg class action attorneys helped to achieve a worker misclassification lawsuit settlement against Farmers Insurance that has received final approval from the court.

Eligible California insurance agents who worked for Farmers are now in line to receive payment from the settlement. Some payments will automatically be sent to class members, but other payments require submitting a claim form.

Background on the Farmers Misclassification Lawsuit

Milberg, along with co-counsel, represented plaintiffs in a class action lawsuit known as Parry et al. v. Farmers Insurance Exchange, et al. The case was filed in California Superior Court on November 16, 2017.

The plaintiffs alleged that the defendant, Farmers Insurance, illegally misclassified Farmers insurance agents in California as independent contractors—rather than as employees—and thus caused the agents to incur unreimbursed business expenses. They claimed that Farmers violated the California Labor Code, which requires employers to reimbursee employees for job-related expenses, as well as the California Unfair Competition Law.

We made great law in this case. A shout out to all who helped bring this home.

In March 2021, the court agreed to let the case proceed as a class action lawsuit. The court granted preliminary approval of a settlement on March 8, 2022. Final settlement approval was given on November 17, 2022. A court order granting final approval describes the settlement as “fair, reasonable, adequate, and proper” and “in the best interests” of the class.

Milberg Senior Partner Greg Coleman originated the lawsuit. “We made great law in this case,” he said. “A true shout out to all who helped bring this home.”

Coleman gave plaudits to the work of attorney Arthur Stock, a class action attorney in Milberg’s Knoxville, Tennessee office, for his efforts in achieving the settlement.

Settlement Amount, Class Members, and How to Make a Claim

Eligible class members include anyone who worked as a Farmers Insurance agent in California between November 16, 2013 and March 8, 2022. Former agents that left, retired, resigned, or were terminated are not excluded from the class.

Per the settlement terms, Farmers agrees to pay $75 million in the form of two payment types:

  • Direct payments: A pro-rated share of $40 million based on how long the agent worked for Farmers during the settlement class period. These payments will be automatically sent to class members, unless they opted out of the settlement by the May 30, 2022 deadline. If you did not opt out, a direct payment will be sent to you.
  • Claims payments: Class members may also be eligible for a payment, up to $10,000, from a $35 million fund for covered business expenses. Note that the deadline to submit a form for claims payments has passed (July 7, 2022).

In addition to these payments, Farmers agreed to make certain systemic changes to its agent agreements that provide at least $15 million in value. The amendments include eliminating Farmers’ right to terminate the agent agreement without cause and the one-year post-termination non-solicitation provision. However, the settlement does not change Farmers agents’ classification as independent contractors.

The court’s settlement approval notice indicates that Farmers has identified 6,548 class members. Accepting the settlement terms means that class members waive the right to independently sue Farmers over the legal issues raised in the case. The deadline to be excluded from the settlement was May 30, 2022.

More information about this lawsuit, the settlement, and class members’ legal rights and options can be found at californiainsuranceagentssettlement.com.

Milberg: A National Leader in Class Action Litigation

Milberg pioneered federal class action lawsuits and remains a national leader in this area. We built our name and reputation by taking on some of the biggest companies in the world and setting groundbreaking legal precedents. Our attorneys have led class actions that resulted in settlements worth tens of millions, hundreds of millions, and even billions of dollars and provided real benefits to class members.

If you are interested in filing a class action lawsuit, contact Milberg for a free case review.

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