Jun. 26--Three former financial representatives for Northwestern Mutual Life Insurance Co. filed a $200 million class-action lawsuit against the company Thursday, accusing it of denying minimum wages and overtime pay.
The lawsuit, filed in federal court in San Diego, argues that the salespeople served as employees but that the Milwaukee-based insurer misclassified them as independent contractors. Independent contractors are exempt from federal and state wage and hour laws, but employees aren't.
The company countered that financial representatives who sell its products are indeed independent contractors, not employees, and that previous court cases have affirmed that business relationship.
The lawsuit contends that when the financial representatives sold Northwestern Mutual products, they had little or no discretion and needed management approval to make decisions. It says they also were required to work more than eight hours per day and more than 40 hours per week but received no overtime compensation. The lawsuit asserts the representatives "are not and never have been independent contractors."
"In a modern society, workers are not indentured servants -- they are entitled to work a livable number of hours at a livable wage," one of their attorneys, David Sanford, of Sanford Wittels & Heisler in Washington, D.C., said in a statement. "Northwestern Mutual has systematically denied basic minimum wage and overtime pay mandated by both the federal Fair Labor Standards Act and California's overtime and minimum wage laws."
Northwestern Mutual spokeswoman Jean Towell said the company is prepared to vigorously defend itself.
"We think the allegations are completely without merit, and Northwestern Mutual believes that will be made fully evident in court," Towell said.
Towell said the individuals who filed the suit "are not and never have been employees of Northwestern Mutual."
"Financial representatives who work within the Northwestern Mutual distribution system are independent contractors; they are not salaried employees," Towell said.
Towell said "court after court has reaffirmed the validity of this type of independent contractor distribution system," including in a similar case last year in federal court in Pennsylvania.
According to the lawsuit, the plaintiffs in the case are Lola Lint, of San Diego, who was a financial and sales representative from 2005 to 2006; Norma Wadell, of Escondido, Calif., from 2006 to 2008; and David Yang, of Duluth, Ga., 2001 to 2007.