A proposed class action lawsuit alleging that insurance agents were improperly treated as independent contractors rather than employees has fallen apart after just about every agent opted out.
Since the proposed class action against FSB Group Ltd. was certified by Ontario’s Superior Court of Justice in 2021, 66 of a possible 69 class members have opted out the litigation. Of the other three, one is dead, one can’t be found, and the other is the plaintiff, Raj Navartnarajah.
As a result, the court decertified the case, which alleged that FSB agents were denied overtime, vacation, and holiday pay because they were improperly classified as independent contractors.
In 2021, the defendants in the case argued that not only was it wrong to claim that agents were misclassified, but that independent status actually benefits agents because, among other benefits, they retained ownership of their books and enjoyed tax certain advantages. FSB said the case was being driven by a single agent to the detriment of most of the others.
While the court initially rejected FSB’s argument and certified the case as a class action, the agents have effectively proven the company correct.
“The negative possibility that was embedded in this claim all along has come true,” the court said in its decision. “As defendants’ counsel put it in his submissions on decertification, the putative class members have voted with their feet.”
The court suggested the claim of the plaintiff alone might be a matter for small claims court.
“It is self-evident that if this action is not decertified, the plaintiff will potentially be in a position to negotiate a ‘class-wide’ settlement in which only he and his counsel will benefit. That is not what one would call access to justice. Indeed, it may be its opposite; it may work an injustice to the rest of the putative class that has opted out,” the court said.