Applying the Common Law Test for Employment, California Court of Appeal Finds That Insurance Agent is Independent Contractor

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In Arnold v Mutual of Omaha, Plaintiff Arnold, an insurance agent for Defendant Mutual of Omaha, after terminating her contract with Defendant, sued for unpaid employee entitlements under the Labor Code. Arnold claimed that the contract she had entered into with Mutual had improperly classified her as an independent contractor, and that under applicable law she was in fact an employee.

On Mutual’s summary judgment motion, the trial court, applying the common law test for employment, determined that Arnold was in fact an independent contractor. Arnold appealed, claiming that the trial court erred in concluding that the common law test for employment was applicable, rather than the broader statutory definition of employee under Labor Code section 2750. Alternatively, she argued that even if the common law test was appropriate, the trial court misapplied the test and should have determined that she was an employee as a matter of law.

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