Complaint Review: State Farm Insurance Companies - Bloomington Illinois

A rebutal by one reader who is considering becoming an agent for State Farm shows just how State Farm misleads those interested in becoming agents for them. This person states the agent owns the business but seems entirely unaware that State Farm has testified the agent owns nothing and does not have a going concern. This was testified to by State Farm Vice President Ralph Bolt in the Baker Case. State Farm didn't want to admit they purchased anything from the agent when the agent retires. State Farm testified the termination payments for an agent are not for the purchase of the business. The rebutal by the person claiming to know the difference between independent contractors and employees falls into the trap of believing State Farm about meeting being required by state and federal law. There are mandatory meetings by State Farm that not required by state or federal law but State Farm leads them to believe they are. The other point the person makes in their rebutal is that "companies are able to 'fire' or terminate contracts for many reasons". This statement is far different than State Farm's claim to be able to terminate at will (in other words for any reason or no reason). Termination at will is a very strong indicator of an employer employee realtionship. State Farm is trying to have it both ways and as shown by the comments of the person writing the rebutal they (State Farm) make the prospective agent think they will own the business when they have testified the agent owns nothing.

The rebutal by the person currently working for a State Farm Agent and considering becoming one him/herself is incorrect. The first line in the second paragraph made by this person states "There are no meetings for State Farm agents that are mandated by State Farm". This person obviously did not note my statement in my report. Four agents, including me, were terminated specifically for not attending a mandatory meeting. State Farm later testified to the IRS, under penalty of perjury, it has no mandatory meetings. I have the documents and can prove their perjury. The mandatory meetings continue today. The last sentence of the third paragraph about companies able to terminate for many reasons is also different than what State Farm claims. State Farm claims they have terminaton at will which is an indication of employer employee relationship. Having reasons to terminate is far different from an at will relationship. In the last paragraph of the rebutal this person states of the agent "because they own the agency". It is obvious this person is not aware of the testimony given to the IRS in the Baker Case where a State Farm Executive testified the agent does not own anything and does not have a going concern. State Farm is having it both ways claiming the agent as an independent contractor but controlling them as employees. Perhaps the person writing the rebutal to my report should do a little more homework and investigate what State Farm has actually testified to before offering his/her rebutal. If the person wants to verify this ask a State Farm Executive to put in writing that the agent owns the business, it won't happen. Make sure any person putting anything in writing is an officer of State Farm so they can be held liable.

I currently work for a State Farm agent and have been looking into becoming an agent. So take what I say how you will, knowing I could be seen as biased. I am not sure what your definition of Independent Contractor is but you may want to look it up. I believe you would then see how companies throughout the U.S. are able to save money, boost profits by using independent contractors and/or consultants. There are no meetings for State Farm agents that are Mandated by State Farm. There are continuing education requirements, fair access requirements, licensing requirements, compliance requirements, etc... These are all required by state and federal laws regarding insurance and investment advisors/agents. I have some knowledge from previous employment and through family members who, themselves are independent contractors/consultants about the reasons they are not employees. Most of these reasons I spelled out in my second paragraph. These companies are able to "fire" or terminate contracts for many reasons, why wouldn't that be the case? In conclusion, I am sure we are all concerned about whether or not the IRS is getting their full share, but even though State Farm agents are not employees of State Farm they pay business taxes (because they own the agency) along with payroll taxes for all their employees, and don't forget about the property taxes (if they own the building they are located in)

I think discussing this with the IRS is more appropriate than posting it on RoR because the IRS ( the US Govt, actually) is the aggrieved party in this matter, not you. Correct? And why would you pass up 5% of state and federal payroll taxes due on approximately $3 Billion of annual payroll, accruing since 1998?