Republished from here: http://www.ufaa.com/pages/article.htm

Farmers State Office – Colorado
Attn: James Purcell – State Executive
PO Box 37107
Denver, CO 80237
August 1, 2007 

Dear Mr. Purcell, 

This letter is in response to your July 2, 2007 email to the Colorado "District Leaders" concerning your planned "one on one" meetings with every agent who writes less than ten auto policies per month.    

Your email says you will "have some tough decisions to make on many of these agents" and "it’s very hard to help someone who is unwilling to take the necessary steps to improve their performance."   

Let me help your decision making process by directing your attention to the Agent Appointment Agreement (AAA), which states, “Nothing contained herein is intended or shall be construed to create the relationship of employer and employee; rather, the Agent is an independent contractor for all purposes.”  It goes on to state, “The time to be expended by the Agent is solely within the Agent’s discretion, and the persons to be solicited and the area wherein solicitation shall be conducted is at the election of the Agent.” And, “The Agent shall, as an independent contractor, exercise sole right to determine the time, place and manner in which the objectives of this Agreement are carried out, provided only that the Agent conform to normal good business practices, and to all State and Federal laws governing the conduct of the Companies and their Agents.”   

UFAA is confident that any court of competent jurisdiction would conclude your threat to take some action against agents not producing some specific number of policies constituted the imposition of a quota.  That action would represent a breach of the AAA because, according to the AAA, “No change, alteration or modification of this Agreement may be made unless it is in writing and signed by the Agent and an authorized representative of the Companies.”  Furthermore, I seriously doubt that Home Office authorized or even has knowledge of your attempt to establish quotas, as that would lend substantial weight to the belief that agents are really employees rather than independent contractors, something that Farmers Group Inc. has constantly fought since the first hearing before the National Labor Relations Board in the 1960s.   For that reason, a copy of this letter is being forward to Home Office Legal, to the attention of Jason Katz.    

Your email said, "That is their choice but we all need to understand each one of us will have consequences based on the choices we make." I do believe that statement is true and, in this case, applies to you.  Are you prepared to live with the consequences of your actions? 

UFAA will be watching closely to see how agents who produce less than ten auto policies in October are treated. 

Ralph Buchanan
Director of Legal Activities
United Farmers Agents Association 

Cc: Jason Katz      Home Office - Legal