A life insurance agent in Alabama who had a rocky relationship with his carrier sued them, alleging they forced him to resign without good reason.
He started as an agent for the company in 2003 and became a great success. Several years he ranked among the carrier’s top producers in the country, won several awards, and earned substantial commissions. It appears that he sometimes cut some corners along the way, however. The carrier on occasion felt compelled to reprimand him, sending him what they labeled “letters of education” or “letters of caution.” These pertained to problems with his documentation and paperwork.
In 2015, some of his clients complained to the carrier about him. One client asked for a refund of premiums paid on a policy, claiming that he had never authorized paying them. Another client made a similar complaint a few months later but went further. The agent, he said, had misrepresented a transaction. He was told that “certain paperwork” would lower his monthly life insurance premium payments. Instead, the paperwork resulted in him buying an unaffordable new policy. He asked the carrier to give him a different agent. The agent denied wrongdoing in both cases.
In early 2016, the carrier’s management learned of the two complaints. A study of his performance showed a pattern of him proposing but not getting sales and selling policies that lapsed or were surrendered within a year. That February a manager met with him to discuss these issues.
By May, the carrier had decided to terminate his contract, finding that he had committed several violations. They found he:
- Had a pattern of unpaid premiums due to checks bouncing; failure to get receipts for policy delivery; and policies canceling shortly after being written.
- Re-used and re-dated clients’ signed bank authorization forms.
- Did not disclose traditional life insurance replacements.
- Told clients to sign blank forms. For example, he had the client who fired him sign blank forms that led to unauthorized loans and bank withdrawals.
- Made recommendations that were unsuitable for the clients.
He argued that he may have been a bit over-exuberant in selling policies, but he otherwise denied doing anything wrong. Nevertheless, in June a manager told him that his contract would be terminated unless he resigned. He wrote a resignation letter the same day. They hand-delivered a termination letter to him three days later but later rescinded it and accepted his resignation.
In the months after his departure, other former clients of his complained about his service. He claimed that the complaints were meritless and the company solicited them. He also accused another of the company’s agents of telling clients that he had stolen millions, would lose his license, and would likely go to jail. The other agent denied this.
He sued the company and the other agent, claiming racial discrimination and defamation. The company and agent moved for summary judgment, a ruling in their favor based on the law when the facts are undisputed.
The judge was completely unpersuaded that race had anything to do with his forced resignation. The agent offered no evidence that the company treated him worse than other similar agents. The judge also found that he did not prove that the company would have treated him differently if he were of a different race. Lastly, he ruled that even if the other agent made the alleged statements, he was acting out of a moral duty to inform clients of what had happened.
It appears that the carrier had the evidence on its side and the agent did not. If he actually did the things of which he was accused, his actions were at least improper. Any carrier or agency would be justified in considering termination of a producer shown to have done these things. Sometimes, it is necessary to part ways with someone who abuses their position.
