Exclusivefocus - National Association of Professional Allstate Agents ...

to our mutual interest to satisfactorily servethe insuring public, to comply with all applicablelaws, to increase business commensuratewith the available potential, and tomaintain the Companies’ operations on aprofitable basis in order to insure the necessaryfinancial strength to protect the policyholders’interests.Insurance is a closely regulated business.The Companies and the agents must dealequitably with policyholders as to rates andclaims, be trustworthy in handling money,avoid false advertising and unfair practices,and refrain from any action that wouldresult in violation, by State Farm or anyagent, of any applicable law or regulation.The Companies believe that agents operatingas independent contractors are bestable to provide the creative selling, professionalcounseling, and prompt and skillfulservice essential to the creation and maintenanceof successful multiple-line companiesand agencies. We do not seek, and willnot assert, control of your daily activities,but expect you to exercise your own judgmentas to the time, place, and manner ofsoliciting insurance, servicing policyholders,and otherwise carrying out the provisionsof this Agreement. You have chosen this independentcontractor relationship, with itsopportunities for financial reward and personalsatisfaction, in preference to one whichwould place you in an employee status.”Leaving no doubt as to the status ofState Farm agents as independent contractors,the preamble confidently statesthe agent’s role in the company. StateFarm’s contract is an adhesion contractthat it is painstakingly crafted to err onthe side of the agent. There is no mentionof an addendum or supplement that canbe modified from time to time. The StateFarm contract is explicit in detail and becauseit is a bilateral contract, assures theagent of mutual loyalty and respect.Reinforcing the message of independence,State Farm repeats a key messagein Section I of the contract, shown below.“Section IMutual Conditions and Duties” [Note:section contains sections A through M]“B. You are an independent contractorfor all purposes. As such you have full controlof your daily activities, with the rightto exercise independent judgment as to time,place, manner of soliciting insurance, servicingpolicyholders, and otherwise carryingout the provisions of this Agreement.”Companies utilizing adhesion contractsfor their independent contractorsmust be careful to delineate not onlyNeed Help Selling AFS?Learn from a ProWhen You Join NAPAAGerry Flores was Number #1 in AFS Production Credit 4Times in the Last 5 Years. After 37 Years as an Allstateagent, Gerry retired last year and now wants to help yousucceed. Receive some good tips when you join NAPAA.To Learn More ContactGerry Flores at (563) 564-1800or at GERBEAR_61@HOTMAIL.COMthe ongoing working relationship in theagreement, but the termination processas well. Companies whose independentcontractors are subject to unreasonabletermination procedures or to other inequitiesin the termination process, aresubject to scrutiny by the IRS. This isbecause the termination of a worker for“any reason” is a key element in establishingan employee/employer “at will” relationshipBoosting Agent Morale theAllstate way: Hire, fire, deny,then repeat.According to the Allstate agent’s contract,it can terminate an agent for “anyreason.” Allstate may then impose thesubjective guidelines in the ever-changingSupplement to disapprove the sale ofthe agency to a prospective buyer. Whilethe termination of an agent’s contractand subsequent disallowing of a sale aretwo separate events, they both clearly areconstituted in Allstate’s favor. BecauseAllstate retains the “right” to amend theSupplement to the Exclusive Agent contractat any time, there is an “unequal”basis for management’s dealings withan agent. Simply put, when a contractis enforced through the imposition ofunilaterally dictated changes, there isan unconscionable event. In Fanning vs.Fritz’s Pontiac-Cadillac-Buick Inc. thecourt ruled there is a “doctrine of unconscionability”where there is an “absenceof meaningful choice on the part of oneparty due to one-sided contract provisions,together with terms which are sooppressive that no reasonable personwould make them and no fair and honestperson would accept them.”Reprinted below is the entire StateFarm Termination of Agreement section.“Section IIITermination of AgreementA. This Agreement will terminate uponyour death. You or State Farm have the rightto terminate this Agreement by written noticedelivered to the other or mailed to theother’s last known address. The date of thetermination shall be the date specified in thenotice, but in the event no date is specified,the date of the termination shall be the date30 — Exclusivefocus Spring 2009