Rose v. Nw. Mut. Life Ins. Co.
| Decision Date | 12 December 2016 |
| Docket Number | ? 14–CV–3569 (JFB) (AYS) |
| Citation | 220 F.Supp.3d 363 |
| Parties | Joseph ROSE, Individually and on behalf of All Other Persons Similarly Situated, Plaintiffs, v. NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY and Northwestern Mutual Investment Services LLC, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Plaintiff is represented by James E. Murphy and Susanne Leeds Klein of Virginia & Ambinder LLP, 40 Broad Street, 7th Floor, New York, NY 10004; and Jeffrey K. Brown and Michael Alexander Tompkins of Leeds Brown Law, P.C., One Old Country Road, Suite 347, Carle Place, New York 11514.
Defendants are represented by Christopher A. Parlo of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, NY 10178.
Plaintiff Joseph Rose ("plaintiff" or "Rose") brings this putative class action against Northwestern Mutual Life Insurance Company ("Northwestern Mutual") and Northwestern Mutual Investment Securities LLC ("NMIS") (collectively, "defendants") alleging New York state law claims for minimum wage and overtime violations pursuant to N.Y. Labor Law ("NYLL") §§ 650 et seq . and N.Y. Comp. Codes R. & Regs. tit. 12, § 142–2.2.
Defendants now move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure and argue that (1) plaintiff was an independent contractor, and not an employee, of Northwestern Mutual and thus exempt from New York's minimum wage and overtime laws; or alternatively (2) even if plaintiff was an employee, he worked as an "outside salesperson" and was therefore also exempt. In addition, defendants assert that plaintiff has no cause of action against NMIS because there was no relationship between the parties. For the reasons stated below, the motion is granted.
Despite months of supplemental discovery, the uncontroverted evidence shows that: (1) plaintiff signed a contract designating him as an independent contractor, rather than an employee, of Northwestern Mutual; (2) plaintiff was aware that he was designated as an independent contractor; (3) Northwestern Mutual did not mandate a set work schedule for plaintiff; (4) Northwestern Mutual did not supervise plaintiff's work; (5) plaintiff was not on Northwestern Mutual's payroll and did not receive fringe benefits from Northwestern Mutual; (6) plaintiff never met with anyone from Northwestern Mutual during his relevant period of work; and (7) plaintiff did not have any relationship with NMIS.
In the face of these uncontroverted facts, plaintiff has adduced no evidence of Northwestern Mutual's involvement in plaintiff's work, other than marketing materials and internship training manuals that Northwestern Mutual supplied to other independent contractors who interacted with plaintiff. However, as a matter of law, such materials (which were not mandatory) do not establish an employment relationship because they do not demonstrate that Northwestern Mutual controlled plaintiff's work. Further, plaintiff has submitted evidence that non-defendants who were also independent contractors of Northwestern Mutual supervised him, but he has failed to set forth evidence from which any such supervision could be imputed to Northwestern Mutual. Accordingly, defendants are entitled to summary judgment because, even construing the evidence most favorably to plaintiff, no rational fact-finder could conclude that plaintiff was their employee. Since the Court holds that plaintiff was an independent contractor under New York law, it does not address defendants' outside salesperson claim.
The following facts are taken from the parties' depositions, affidavits, and exhibits, as well as their respective Rule 56.1 statements of fact ( ECF No. 49; "Pl.'s 56.1" and "Pl.'s 56.1 Counterstatement," ECF No. 54; and . Unless otherwise noted, the facts are either undisputed or uncontroverted. Upon consideration of the motion for summary judgment, the Court shall construe the facts in the light most favorable to plaintiff as the nonmoving party and will resolve all factual ambiguities in his favor. See Capobianco v. New York , 422 F.3d 47, 50 n.1 (2d Cir. 2001).
Defendant Northwestern Mutual is an insurance company headquartered in Milwaukee, Wisconsin whose core business is underwriting, issuing, and servicing insurance policies and annuities. (Defs.' 56.1 ¶¶ 1, 3.) Defendant NMIS is a subsidiary of Northwestern Mutual that provides brokerage and advisory services to individuals and businesses regarding securities and other registered products. (Id . ¶ 2.)
Northwestern Mutual does not directly solicit prospective customers to apply for its insurance products, and it does not hire any employees to sell its products. (Id . ¶¶ 4–5.) Instead, Northwestern Mutual exclusively markets its policies and annuities through a network of independent insurance agents who individually contract with "General Agents" to sell those products. (Id . ¶ 7.) General Agents are independent contractors who solicit applications from potential customers. (Id . ¶¶ 8–9.) They may also enter into separate agreements with "District Agents" and/or "Field Directors" to expand their agencies. (Id . ¶ 10.) Like General Agents, neither District Agents nor Field Directors are employees of Northwestern Mutual, but instead are licensed insurance agents who operate their own businesses. (Id . ¶ 11.) District Agents and Field Directors may in turn contract with Financial Representatives ("FRs" or "Agents"), including college students, and the agreements that FRs sign with General Agents, District Agents, and/or Field Directors provide that these individuals are independent contractors and not employees of the General Agent, District Agent, Field Director, or Northwestern Mutual. (Id . ¶¶ 12–13; Pl.'s 56.1 ¶ 13.)
a. Internship Program
Northwestern Mutual runs an internship program for college students and maintains a web site that allows interested students to submit applications to become FRs. (Pl.'s 56.1 Counterstatement ¶¶ 99–101, 170–72; Defs.' 56.1 Counterstatement Resp. ¶¶ 99–101, 170–72.) During the time period relevant to this case, Michael Van Grinsven was Northwestern Mutual's Internship Director and oversaw the development of Northwestern Mutual internship materials and branding. (Van Grinsven Dep. Tr., ECF No. 53–11, at 18–19; Pl.'s 56.1 Counterstatement ¶¶ 159–60; Defs.' 56.1 Counterstatement Resp. ¶¶ 159–60.) Van Grinsven testified that Northwestern Mutual produced materials that promoted the Company and the internship program, and "that describe[d] individuals that have interned and at graduation decided to become full-time representatives." (Van Grinsven Dep. Tr. at 20–21; Pl.'s 56.1 Counterstatement ¶¶ 161–62; Defs.' 56.1 Counterstatement Resp. ¶¶ 161–62.) Northwestern Mutual also maintained a database of the insurance policies sold by college FRs, and the Company's Internship Growth Consultant, an employee working under Van Grinsven, advised Northwestern Mutual agencies on "best practices" in recruiting and developing college students. (Pl.'s 56.1 Counterstatement ¶¶ 165–67; Defs.' 56.1 Counterstatement Resp. ¶¶ 165–67.)
Northwestern Mutual also used College Unit Directors ("CUDs") to manage the internship program, and CUDs received a stipend of $600 per month paid to them by agencies that were then partially reimbursed by Northwestern Mutual. (Pl.'s 56.1 Counterstatement ¶ 183; Defs.' 56.1 Counterstatement Resp. ¶ 183.) To receive the stipend, CUDs were required to e-mail tracking forms of college FRs' activity to Northwestern Mutual. (Pl.'s 56.1 Counterstatement ¶ 184; Defs.' 56.1 Counterstatement Resp. ¶ 184.)
Northwestern Mutual provided several booklets offering guidance to CUDs and college FRs. The first, entitled "Welcome to the College Unit Director Start–Up Program," included, inter alia , a sample tracking form for CUDs to monitor FR activity. (Decl. of James Emmet Murphy ("Murphy Decl."), ECF No. 53, Ex. R; Pl.'s 56.1 Counterstatement ¶ 185; Defs.' 56.1 Counterstatement Resp. ¶ 185.) In addition, the "Intern Leadership Guide" advised CUDs on how to develop college students. (Murphy Decl., Ex. S; Van Grinsven Dep. Tr. at 110; Pl.'s 56.1 Counterstatement ¶ 190; Defs.' 56.1 Counterstatement Resp. ¶ 190.) Among other things, it included information on the intern selection process. Finally, "Your Internship, Your Career: A Guidebook to Success" advised college FRs on the structure of the internship program and on how to market insurance products successfully. (Murphy Decl., Ex. T; Pl.'s 56.1 Counterstatement ¶¶ 192–93; Defs.' 56.1 Counterstatement Resp. ¶¶ 192–93.)
From approximately June 2010 to October 2010, plaintiff was licensed and appointed to sell Northwestern Mutual insurance products as a college FR. (Defs.' 56.1 ¶ 15; Pl.'s 56.1 ¶ 15.)1 On June 16, 2010, plaintiff executed a "College Student Agent's Contract" (the "Contract") with Krystin Boylan, née Fischer ("Boylan"), a CUD in New York City.2 (Defs.' 56.1 ¶ 16; Pl.'s 56.1 ¶ 16; Aff. of Christopher A. Parlo ("Parlo Aff."), ECF No. 51, Ex. 5.) Robert Seery, a General Agent in White Plains, New York and owner of The Seery Financial Group (the "Seery Agency"), and a representative of Northwestern Mutual subsequently endorsed the Contract. (Defs.' 56.1 ¶ 17; Pl.'s 56.1 ¶ 17; Parlo Aff., Ex. 5.) Both Boylan and the Seery Agency are independent contractors of Northwestern Mutual. (Boylan Dep. Tr., ECF No. 53–2, at 215; Seery Dep. Tr., ECF No. 53–4, at 29.)
Plaintiff applied for this position at a career fair where he filled out an application. (Pl.'s 56.1 Counterstatement ¶ 106; Defs.' 56.1 Counterstatement Resp. ¶ 106.)3 The Contract expressly stated that plaintiff "shall be an independent contractor and nothing...
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