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$200 Million Class Action Filed Against Northwestern Mutual

Posted June 25th, 2009.

Former Employees Detail Federal and State Wage and Hour Abuses

For more information, contact Jamie Moss, newsPRos, 646-791-4848

(June 25, 2009, Los Angeles, CA) – Three former employees of Northwestern Mutual Life Insurance Company today filed a suit alleging longstanding federal and state wage and hour violations by the company in US District Court for the Southern District of California in San Diego. The complaint asserts the plaintiffs and other employees of the company in similar sales and financial representative positions were denied the minimum pay and overtime compensation to which they were entitled.

The two California plaintiffs in the matter requested certification of a class on behalf of hundreds of California employees or former employees of the insurance company, and $100 million in unpaid wages and liquidated damages on behalf of the class for violations of state law. The federal plaintiffs also requested unpaid wages and liquidated damages of $100 million.

Plaintiffs and class representatives include Lola Lint, a resident of San Diego who worked for Northwestern Mutual in the Del Mar office in 2005-2006; Norma Waddell, a resident of Escondido who worked for the company in 2006-2008 in both its Del Mar and Newport Beach offices , and David Yang, a resident of Duluth, Georgia, who worked in the company’s Charlotte, NC, and GA, offices from 2001-2007.

They are represented in the matter by David Sanford of Sanford Wittels & Heisler, Washington, DC; Grant Morris of the Law Offices of Grant E. Morris, Washington, DC; and Edward D. Chapin and Jill Sullivan, Of Counsel to Sanford Wittels & Heisler in San Diego, CA.

“In modern society, workers are not indentured servants – they are entitled to work a livable number of hours at a livable wage,” said Mr. Sanford. “Northwestern Mutual has systematically denied basic minimum wage and overtime pay mandated by both the federal Fair Labor Standards Act and California’s overtime and minimum wage laws.”

The complaint alleges that the giant insurer, whose principal place of business and headquarters is in Milwaukee, WI, bilks its sales and financial representatives in California and other states by intentionally and repeatedly misclassifying them as “independent contractors” rather than as employees. Independent contractors are exempt from federal and state wage and hour laws, but employees are not.

Ms. Waddell and Mr. Yang are suing under the federal Fair Labor Standards Act (FLSA) and Ms. Lint and Ms. Waddell are suing under California law.

As the complaint details, sales and financial representatives at Northwestern Mutual are responsible for finding clients, selling them insurance products, and following up with them if they have questions. They have little, if any, discretion; are required to secure management approval before making decisions; and do not have the authority to make independent choices relating to management, management policies or general operations. They clearly do not operate as independent contractors.

During their periods of employment, Ms. Lint, Ms. Waddell and other members of the class were required by Northwestern Mutual to work daily shifts longer than eight hours, and more than 40 hours per week, but did not receive the overtime pay to which these hours entitled them. Furthermore, they were paid less than California’s minimum wage — $7.50 per hour as of January, 2007, and $8 per hour as of January 2008 – during their periods of employment.

The complaint asserts that the company’s failure to pay overtime constitutes unlawful, unfair and/or fraudulent activity prohibited by the California Business and Professions Code by which it has reaped and continues to reap benefits and illegal profits at the expense of its employees.

“Northwestern Mutual must stop its willful and illegal behaviors immediately, be made to disgorge its ill-gotten gains, and restore the wrongfully withheld wages to its employees and former employees,” said Mr. Morris, co-counsel for the plaintiffs.

The class representatives demand a jury trial on all questions of fact raised in the complaint.

Sanford Wittels & Heisler is a law firm with offices in Washington, DC, New York, New Jersey, and San Francisco that specializes in employment discrimination, wage and hour, consumer and complex corporate class action litigation and has represented thousands of individuals in some of the major class action cases in the United States. The firm also represents individual clients in employment, employment discrimination, sexual harassment, whistleblower, public accommodations, commercial, medical malpractice, and personal injury matters.