377 F.3d 522 (6th Cir. 2004), 03-5143, Weary v. Cochran

Docket Nº:03-5143.
Citation:377 F.3d 522
Party Name:John WEARY, Plaintiff-Appellant, v. William S. COCHRAN, et al., Defendants-Appellees.
Case Date:July 29, 2004
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

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377 F.3d 522 (6th Cir. 2004)

John WEARY, Plaintiff-Appellant,


William S. COCHRAN, et al., Defendants-Appellees.

No. 03-5143.

United States Court of Appeals, Sixth Circuit

July 29, 2004

Argued: March 9, 2004.

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Angus Gillis III (argued and briefed), Ashley N. Arnold (briefed), Schulman, Leroy & Bennett, Nashville, TN, for Appellant.

Winston N. Harless (argued and briefed), John Roy Tarpley (briefed), Lewis, King, Krieg & Waldrop, Nashville, TN, Robert E. Boston (argued and briefed), Stanley E. Graham (briefed), Waller, Lansden, Dortch & Davis, Nashville, TN, for Appellees.

Before MARTIN and CLAY, Circuit Judges; MILLS, District Judge.[*]

MARTIN, J., delivered the opinion of the court, in which Mills, D. J., joined. CLAY, J. (pp. 528-38), delivered a separate opinion.

BOYCE F. MARTIN, JR., Circuit Judge.

John Weary appeals the district court's dismissal of his complaint alleging claims under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., and under Tennessee state law against Northwestern Mutual Life Insurance Company and William S. Cochran. For the reasons that follow, we AFFIRM.


Northwestern Mutual Life Insurance Company markets its products through "General Agents," who in turn contract with "Special Agents." Northwestern Mutual hired William S. Cochran as its General Agent and granted him the exclusive contractual right to market Northwestern Mutual products in Tennessee. Cochran's insurance agency was located in Nashville and, as of January 2000, had nearly one hundred Special Agents under contract. Weary served as one of those Special Agents from 1973 until 2000.

The contract governing Weary's business relationship with Cochran, called the "Full-Time Special or Soliciting Agent's Contract," provided that the "Agent [Weary] shall be an independent contractor and nothing herein shall be construed to make Agent an employee of the Company [Northwestern Mutual], General Agent [Cochran], or First Party [Cochran]." Weary was paid solely upon a commission basis, and agreed to meet certain minimum selling standards set by Northwestern Mutual and Cochran. Cochran set higher standards than Northwestern Mutual, as he was permitted to do, and when Weary failed to meet his minimum earnings standards

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in 1998 and 1999, Cochran fired him. At the time of his termination, Weary was over forty years of age. Weary filed a claim with the Equal Employment Opportunity Commission, asserting that he was impermissibly terminated because of his age. The Commission found, however, that no employer-employee relationship had existed. Thus, the Commission closed its file and issued a right to sue letter.

Weary then filed the instant complaint against Northwestern Mutual and Cochran, asserting claims under the Age Discrimination in Employment Act, as well as state law claims for breach of contract, breach of the duty of good faith and fair dealing, fraud in the inducement to contract and negligent or intentional misrepresentation. The district court awarded summary judgment in favor of Northwestern Mutual and Cochran on the federal age discrimination claims, holding that neither qualified as Weary's "employer" within the meaning of the Act. Having dismissed the federal claims, the district court also dismissed the state law claims for lack of jurisdiction.


The sole issue in this appeal is whether Weary was an "employee" of Northwestern Mutual or Cochran within the meaning of the Act. In analyzing the district court's resolution of this issue, we employ de novo review, using the same standard under Federal Rule of Civil Procedure 56(c) used by the district court. Shah v. Deaconess Hosp., 355 F.3d 496, 498 (6th Cir. 2004). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In viewing the evidence, we must draw all reasonable inferences in favor of Weary, as the nonmoving party. Shah, 355 F.3d 496.

Like other federal employment discrimination statutes, the Age Discrimination in Employment Act protects employees, but not independent contractors. Shah, 355 F.3d at 499; Simpson v. Ernst & Young, 100 F.3d 436, 438 (6th Cir. 1996). The determination of whether a plaintiff qualifies as an employee under the Act "is a mixed question of law and fact" that a judge normally can make as a matter of law. Lilley v. BTM Corp., 958 F.2d 746, 750 n. 1 (6th Cir. 1992). As a general matter, this Court has repeatedly held that insurance agents are independent contractors, rather than employees, in a variety of contexts. See, e.g., Ware v. United States, 67 F.3d 574 (6th Cir. 1995) (insurance agent was an independent contractor for tax purposes); Wolcott v. Nationwide Mut. Ins. Co., 884 F.2d 245 (6th Cir. 1989) (insurance agent was an independent contractor under ERISA); Plazzo v. Nationwide Mut. Ins. Co., 892 F.2d 79, 1989 WL 154816 (6th Cir. Dec.22, 1989) (unpublished opinion) (same). Other courts are in accord with this view. See, e.g., Butts v. Comm'r of Internal Revenue, 49 F.3d 713 (11th Cir. 1995) (insurance agents were independent contractors for tax purposes); Oestman v. Nat'l Farmers Union Ins., 958 F.2d 303 (10th Cir. 1992) (insurance agent was an independent contractor under the Age Discrimination in Employment Act).

We have recently clarified that the proper test to apply in determining whether a hired party is an employee or an independent contractor under the Act is the "common law agency test" set forth in Nationwide Mutual Insurance Company v. Darden, 503 U.S. 318, 322, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992). See Shah, 355 F.3d at 499. In Darden, the Supreme

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Court described the common law agency test as follows:

In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.

Darden, 503 U.S. at 323-24, 112 S.Ct. 1344; see also Shah, 355 F.3d at 499-500; Simpson, 100 F.3d at 443. "Since the common-law test contains no shorthand formula or magic phrase that can be applied to find the answer, ... all of the incidents of the relationship must be assessed and weighed with no one factor being decisive." Darden, 503 U.S. at 324, 112 S.Ct. 1344. Of the applicable Darden factors,1 the vast majority weigh in favor of characterizing Weary as an independent contractor, rather than an employee.

The crux of Darden's common law agency test is "the hiring party's right to control the manner and means by which the product is accomplished." 503 U.S. at 323, 112 S.Ct. 1344. This is a broad consideration that is embodied in many of the specific factors articulated in Darden. Our analysis of those factors--which is set forth below--reflects upon, and is relevant to, this core issue of control. Before turning to those specific factors, however, we consider in a more general manner the extent to which Northwest Mutual or Cochran had the right to control the manner and means by which Weary marketed and sold life insurance policies.

We begin by noting two pieces of evidence that shed light on how the parties themselves viewed the nature of their working relationship. First, the Special Agent Contract characterized Weary as an "independent contractor" and explicitly cautioned that "nothing herein shall be construed to make [him] an employee" of Northwestern Mutual or Cochran. This evidence, while not dispositive of the issue, is certainly relevant to the inquiry. See, e.g., Eyerman v. Mary Kay Cosmetics, Inc., 967 F.2d 213, 218 (6th Cir. 1992) (emphasizing that a cosmetic salesperson's employment agreement "unambiguously declared [her] to be an independent contractor"); Wolcott v. Nationwide Mut. Ins. Co., 884 F.2d 245, (6th Cir. 1989) (noting the significance of the employment agreement's characterization of the plaintiff insurance agent as "an independent contractor and not an employee"); Daughtrey v. Honeywell, Inc., 3 F.3d 1488, 1492 (11th Cir. 1993) (the fact that the consultant agreement stated that the plaintiff was hired as an independent contractor was "probative of the parties' intent" regarding the nature of the employment relationship).

Second, Weary admitted in his deposition that he intended to be an independent contractor:

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Q. So by contract, you agreed that you were an independent contractor and not an employee of Mr. Cochran or Northwestern Mutual, correct?

A. According to this document and what I was led to believe, the answer is yes, but the law says if one party has control over the other party, then it doesn't make any different what the parties to the contract call themselves, you have an employer/employee relationship.

Q. What I get confused about that, Mr. Weary, is going back to your initial comments ... in essence, you intended that to be true, correct?

A. That's correct. But I--

Q. You have intended to be an independent contractor, didn't you?

A. I did. But the law changed the contract.

(Emphasis added).

In addition to this evidence concerning the parties' intent, the record...

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