What Are my Rights As a Producer

[dawnlove]

Hello Everyone,

I'm very happy to have found this forum and am hopeful that someone here may be able to help or at least direct me in the best direction.

My situation - I started working for a small insurance brokerage selling Business Liability roughly 13 years ago. I was 21 at the time and within a year I decided to obtain my insurance license and start selling. The company I work with placed me on a 1099 tax form. At the time I didn't think too much about it however, 12+ years later as I've learned much more about the industry I'm very concerned about my future with this company. I never signed a contract when I transitioned to producer, they have made is clear they expect me in the office at least twice a week, and they have on occasion made it clear that I need to be in the office during certain holidays etc.

I don't feel comfortable going to the owners to discuss these things as I've seen them truly only care about there own well being and I do not trust that they will have both of our interests in mind.

Location: California however brokerage is licensed in multiple states so I work all over the US.

My Questions:

Are the clients I've written legally my clients?
If I leave can I legally take these clients with me?
If not, should I then be classified as and employee? With that would I have a lawsuit against them for back taxes?

I'm recently married and looking into the future with my husband. That future does not include this company, I truly feel that I need to get out right away but I can't find any advice online.

Silly 21 year old me really did not know what she was getting into.

I greatly appreciate all of your advice.

 

[Josh]

Easiest thing to do is just to cut ties and move on.

Based off only what you've posted it sounds like you *may* have an argument for being classified as an employee, but it's grey at best.

On the applications for the insureds, who is the agent or agency of record? I'm guessing it's the company you're referring to in which case it's definitely theirs. If it's you, probably still theirs, but maybe not.

What does your contract say?

If you did it for 13 years, it doesn't sound like it could have been all bad. You can spend a lot of money arguing over some points you're discussing, but odds are it's a waste of time and you're better off just taking that effort and moving forward instead of looking behind.

 

[dawnlove]

Hello Josh,

Thank you for your reply. The Agency of Record is the brokerage, I am listed as the producer only.

There was never a contract - at 21 it wasn't something I even knew I needed to inquire on, as I've gained experience I've learned differently.

I've buried my head in the sand for a long time with this company however, the last 7 years have been very rough here and I just no longer trust the company. I've also learned of very unethical practices which make me very uncomfortable.

Would it be wise of me to discuss with them the lack of a contract?

A couple years ago I had a conversation with the owner as to what would happen if I decided to leave the industry and they always said that they would buy the book of business if that time came. Which then leads me to be concerned as to what they would value it at.

Frankly I have no trust for them and would prefer to be on my own.

 

[somarco]

Check with the CA DOL. If they provided you with an office, had expectations of regular hours, etc you should have been classified as a W2 employee, not 1099. Might give you some leverage in extracting yourself from this mess.

 

[adjusterjack]

Would it be wise of me to discuss with them the lack of a contract?

No. As long as you desire to leave anyway I suggest you don't discuss anything with anybody until you have your next job nailed down. You don't want to telegraph your intentions and give them the opportunity of doing you dirty.

Frankly I have no trust for them and would prefer to be on my own.

Then do it.

That you don't have any contract could be to your advantage since you would also not have a non-compete agreement which means you take all your customers with you on "agent of record" letters if you get to represent the same carriers or you re-write them on renewal with your own carriers.

 

[Josh]

That you don't have any contract could be to your advantage since you would also not have a non-compete agreement which means you take all your customers with you on "agent of record" letters if you get to represent the same carriers or you re-write them on renewal with your own carriers.

As a matter of law there is a good chance that customer list is considered the property of the agency especially since, if her own admission, she was told she would have to buy the book of business which would make taking it without payment a form of theft.

 

[adjusterjack]

As a matter of law there is a good chance that customer list is considered the property of the agency

What law in CA says that? Can you cite it for me?

if her own admission, she was told she would have to buy the book of business which would make taking it without payment a form of theft.

She wrote that the broker would buy her book of business:

A couple years ago I had a conversation with the owner as to what would happen if I decided to leave the industry and they always said that they would buy the book of business if that time came.

Whether the broker would honor that now is anybody's guess but I do agree that there could be a dispute over ownership of the accounts.

 

[DHK]

Lack of legal contracts on their part, does not constitute implied compliance on my part. Let them learn their lesson for not having had a contract... but it may cost you to enforce that right/privilege to keep your client base.

 

[entrep1776]

No. As long as you desire to leave anyway I suggest you don't discuss anything with anybody until you have your next job nailed down. You don't want to telegraph your intentions and give them the opportunity of doing you dirty.

This..........

Another thing don't make it personal. easier said than done. Do it as a business decision. Not worth the stress. I'm sure they aren't paying enough to get upset.

I don't know the laws or your situation. If you have your next gig set up, you're in a much better negotiating position.

 

[Josh]

What law in CA says that? Can you cite it for me?



She wrote that the broker would buy her book of business:



Whether the broker would honor that now is anybody's guess but I do agree that there could be a dispute over ownership of the accounts.

It is usually considered a trade secret. Look that up; most states use the uniform trade secrets act.

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Lack of legal contracts on their part, does not constitute implied compliance on my part. Let them learn their lesson for not having had a contract... but it may cost you to enforce that right/privilege to keep your client base.

Legally speaking these are their customers until proven otherwise. They are the AOR according to her.