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referred to the district manager as an employee. The Contract
limited petitioner’s territory to six named counties in the State
of North Dakota. The contract that petitioner had previously
signed when he was a sales representative (before becoming
district manager) contained virtually identical language with
respect to the obligation to abide by rules, regulations, and
directions of Combined.
Under its terms, the district manager could terminate the
Contract upon 2 weeks' notice. Combined could likewise terminate
the Contract upon 2 weeks' notice, or without notice if the
termination was for cause. “Cause” included, among other
reasons, failure to observe and practice Combined’s underwriting
principles, financial irregularity, sale of new policies when
renewals should have been sold, failure to settle accounts, and
commission of a felony.
Before 1975, insurance agents who sold Combined’s insurance
policies were treated as independent contractors. Combined
wanted to change the status of the agents from independent
contractor to employee, and to that end Combined altered the
contract it used. The new contract was designed to demonstrate
that Combined had sufficient right of control over the insurance
agents’ actions so that there would be no doubt that the agents
were employees. Combined made this change in part because of
concern with respect to various governmental agencies, including
the Internal Revenue Service, about liabilities for
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Last modified: May 25, 2011