In Arnold v. Mutual of Omaha Ins. Co., 202 Cal. App. 4th 580 (2011), the California Court of Appeal held that a nonexclusive insurance agent working for the defendant (as well as other insurance companies) was not entitled to expense reimbursements, unpaid wages, or related penalties because the company properly classified her as an independent contractor, thereby precluding her entitlement to these employee benefits.

In this case, the Court held that the following items of evidence demonstrated the existence of an independent-contractor relationship rather than an employment relationship:

  • The plaintiff used her own judgment in determining whom she would solicit for applications for Mutual’s products; the time, place, and manner in which she would solicit; and the amount of time she spent soliciting for Mutual’s products.
  • The plaintiff’s appointment with Mutual was nonexclusive, and she in fact solicited for other insurance companies during her appointment with Mutual.
  • The plaintiff’s assistant general manager at Mutual did not evaluate her performance and did not monitor or supervise her work.
  • Training offered by Mutual was voluntary for agents, except as required for compliance with state law.
  • Agents who chose to use the office were required to pay a fee for their workspace and telephone service.
  • The plaintiff’s minimal performance requirement to avoid automatic termination of her appointment was to submit one application for Mutual’s products within each 180-day period.
  • The plaintiff was engaged in a distinct occupation requiring a license from the Department of Insurance, and was responsible for her own instrumentalities or tools with the exception of limited resources offered by Mutual to enhance their agents’ successful solicitation of Mutual’s products.
  • Although Mutual paid its agents in a systematic way every two weeks, the plaintiff’s payment—chiefly commissions—was based on her results and not the amount of time she spent working on Mutual’s behalf.
  • Finally, both the plaintiff and Mutual believed, at the time of her appointment, they were creating an independent contractor relationship and not an employee relationship.  Indeed, one clause of the contract the plaintiff entered into with Mutual stated that she was “an independent contractor and not an employee,” that no terms of the contract “shall be construed as creating an employer-employee relationship,” and that Arnold was “free to exercise [her] own judgment as to the persons from whom [she] will solicit and the time, place and manner, and amount of such solicitation.”

For these reasons, the Court concluded that “under the principal test for employment under common law principles, Mutual had no significant right to control the manner and means by which Arnold accomplished the results of the services she performed as one of Mutual’s soliciting agents,” and that “all the factors weighed and considered as a whole establish that Arnold was an independent contractor and not an employee.”


Bernstein & Friedland, P.C. is a boutique employment law firm in Los Angeles specializing in wrongful termination, discrimination, harassment, retaliation, and unpaid wage and overtime matters.  Please visit our website at to learn more about us.

Polina Bernstein

Polina Bernstein

Polina Bernstein founded Bernstein & Friedland, P.C. in 2009 and is lead litigation counsel at the firm.

Diana Friedland

Diana Friedland

Diana Friedland is a partner at Bernstein & Friedland, P.C. Her practice focuses on employment litigation and counseling.

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to content