## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 96-2294

___________ Keith Birchem, * * Plaintiff - Appellant, * * Appeal from the Unite d States v. * District Court for the * District of North Dakota. Knights of Columbus; * Daniel N. Wentz, * * Defendants - Appellees. *

___________ Submitted: February 13, 1997 Filed: May 30, 1997

___________ Before MAGILL, BEAM, and LOKEN, Circuit Judges.

___________ LOKEN, Circuit Judge.

Terminated insurance agent Keith Birchem appeals the dismissal of his claims for disability discrimination , breachof contract, retaliatory discharge, an d intentionalThe HONORABLE RODNEY S. WEBB, Chief Judge of the United States 1 District Court for the District of North Dakota. -2- infli ctionof emotional distress. The district court 1 gran ted summary judgment primarily on the ground tha t Birc hemwas an independent contractor, not an employee
. We affirm.
Knights of Columbus (“KOC”) is a non-profit fraterna l benefit so ciety that offers life insurance and annuities to members of the Catholic Church. Daniel N. Wentz i s KOC’ s general insurance agent in eastern North Dakota
. In July 19 88, Wentz appointed Birchem a KOC field agent, granting h im the exclusive right to sell KOC policies to members of four Catholic churches. The appointment wa s reflected in a Field Agent Contract between KOC, Wentz , and Birche m. The contract was renewed in 1990 and 1992.
Duringtwo of his years as a KOC field agent, Birche m was Wentz’s lowest producer, and Birchem never place d better than sixth out of eight Wentz agents in overal l perform ance. Even in his best year, Birchem received a lett er from KOC warning that his production had falle n below t he minimum needed to retain pension and healt h benefits. Two agents with performance histories similar to Birchem’s resigned during this period. Inthe summer of 1992, Birchem began looking for a new position ,-3-

spea king with general agents for several other insurer s and invest igating the purchase of an independent agency.

Th at fall, the Wentz field agents attended a join t conference with KOC agents from Minnesota. Birchem told other field agents that Wentz was encouraging agents-4-

to e ngage in improper competitive practices. Birche m also said that he no longer wished to work for Wentz and was lookin g for another position. Wentz and Birchem met
on Octo ber 12 to discuss Birchem’s comments. Birche m told Wentz that he felt uncomfortable coming to th e office andhad lost all respect for Wentz because of his market ing practices. Wentz said that he felt that hi s relationsh ip with Birchem was irretrievably damaged. In early November, Wentz told Birchem to resign or be fired. Birche mresigned on November 5 and began working for a competing insurer one month later.

Birchemfiled this wrongful termination suit , claiming that he was constructively discharged i n viol ationof the Americans with Disabilities Act, 4 2 U.S.C. § 12112 (“ADA”), and the North Dakota Human Rights Act, N.D.C.C. § 14-02.4-03(i) (“NDHRA”), because Went z would not accommodate Birchem’s disability, bipola r diso rder or manic depression. Birchem also asserte d pendent cl aims for unlawful retaliation, because Birchem had accuse d Wentz of improper trade practices; breach of an oral contract not to terminate the writtenField Agent Cont ract so long as Birchem met minimum productio n objectives; and intentional infliction of emotiona l distress. At th e close of discovery, KOC and Wentz moved fo r summ aryjudgment. Both sides filed extensive fac t submissions. At the motion hearing, the district cour t-5-

raise d an issue not briefed by the parties -- whethe r field a gent Birchem was an employee or an independen t co ntractor. The parties submitted additional fac t mater ials on that issue, and the court then grante d
summaryjudgment in favor of both defendants. I t concluded that Birchem was an independent contractor and there fore not protected by the ADA, the NDHRA, or th e North Dako ta public policy against retaliatory discharge-6-

of a whistleblower. Alternatively, the court conclude d that Birchem has no evidence of a pretextual discharge
. It dismissed his contract claim because the Field Agen t Contract w as terminable at will and may not be varied by Went z’s prior oral representations. Finally, the cour t held that Birchem could not prove the “extreme an d outrageous conduct” necessary for a claim of intentional infl iction of emotional distress. Birchem appeals eac h of those rulings.

I. Birchem’s ADA Claim.

A. The Employee Issue. Like Title VII, the AD A protects “employees” but not independent contractors
. See W ilde v. County of Kandiyohi , 15 F.3d 103, 104 (8t h Cir. 1994). The Act defines an “employee” as “a n ind ividual employed by an employer.” 42 U.S.C. § 12111(4). When Congress uses this “completely circular” definition, courts apply the general common l aw of agency to distinguish between protected employees an d unprotected independent contractors. Nationwide Mut
. Ins. Co. v. Darden , 503 U.S. 318, 323 & n.3 (1992).

In app lying the common law of agency test, th e Supreme Court looks at the large number of factors tha t define the parties’ total contractual relationship, n o one of which is determinative. See Community fo r Crea tive Non-Violence v. Reid , 490 U.S. 730, 751-5 3-7-

(1989 ), followed in Darden , 503 U.S. at 323-324. Th e Court “typ ically weighs the common-law factors listed in the Restat ement [(Second) of Agency § 220(2) (1958)] and some addit ional factors related to the worker’s economic situ ation, like how the work relationship may b e termi nated, whether the worker receives yearly leave , whe ther the worker accrues retirement benefits, an d whether the hiring partyConsistent with this provision, the Contract permitted Birchem “to exercise 2 independent judgment as to the eligible persons from whom applications for insurance will be solicited, and as to the time and place of such solicitation.” -8- pays socia l security taxes.” Wilde , 15 F.3d at 105. We revi ewthe ultimate question of employment status d e novo . See Berger Transfer & Storage v. Central States , S.E. & S.W. Areas Pension Fund , 85 F.3d 1374, 1378 (8t h Cir. 1996).

We agree with the district court that Birchem and KO C had an ind ependent contractor relationship. First, each Field Agent Contract expressly provided that “[n]othin g contained in this Agreement shall be construed to create the relationship of employer and employee between” KO C and Bir chem, KOC and Wentz, or Wentz and Birchem. 2 Second, the parties’ financial relationship strongl y suggests Birchem was an independent contractor. He wa s paid on a commission basis, KOC did not withhold incom e taxes from

his commissions, and Birchem reported his KOC
earn ings as income of a self-employed individual fo r federal ta x purposes. Third, the unrefuted affidavit of a Vice Pre sident in KOC’s Agency Department averred that KOC does not control a field agent’s daily activities
. Fin ally, federal courts have consistently held tha t insurance agents are unprotected independent contractors, and Birche m has cited no contrary authority. See, e.g. , Oestman v. National Farmers Union Ins. Co. , 958 F.2d 303-9-

(10th C ir. 1992) (ADEA); Knight v. United Farm Burea u Mut. Ins. Co. , 950 F.2d 377 (7th Cir. 1991) (Title VII); United States EEOC v. Catholic Knights Ins. S oc’y , 915 F. Supp. 25 (N.D. Ill. 1996) (Title VII); Robinson v
. Banke rs Life & Cas. Co. , 899 F. Supp. 848 (D.N.H. 1995 ) (ADA). Al though some aspects of KOC’s relationship with its field agents would be consistent with emp loyment, the balance of factors clearly supports the district court’s independent contractor determination.-10-

Birchem asserts his ADA claim against Wentz, as well
as KOC. Because Wentz and his general agency wer e inde pendent of KOC, Wentz might have been Birchem’ s emplo yer even if KOC was not. An important factor i n dete rmining employee status is “[t]he hiring party’ s right to control the manner and means of the worker’ s product,” that is, the extent to which Wentz directed and controlled Birchem’s day-to-day activities as a KOC field agent. Wilde , 15 F.3d at 105. Birchem submitted a n affidavit with supporting documents detailing Wentz’ s extensive day-to-day direction and control. Defendant s submitted nothing from Wentz refuting these a verrals, and Went z’s deposition is laced with language suggesting a n emplo yee relationship. The district court onl y addresszedthe employee question from the perspective of Birc hem’s relationship with KOC. We conclude that th e summ aryjudgment record raises a genuine issue o f material f act as to whether Birchem was Wentz’s employee for A DA purposes. Thus, we must turn to the distric t court’s al ternative ground for granting summary judgment in favor of Wentz.

B. The Pretext Issue. In late 1991, when Birchem wa s diagnosed with bipolar disorder, he advised W entz that he was taking lithium to stabilize his mood swin gs. Birchem contin ued to work and did not ask Wentz to accommodat e this condition. However, he now argues that Went z viol ated the ADA by taking adverse employment actio n-11-

because of this disability. Lacking direct evidence o f disabilitydiscrimination, Birchem must avoid summar y judg ment on this claim by using the burden-shiftin g framewo rk of St. Mary’s Honor Center v. Hicks , 509 U.S
. 502 ( 1993). See Price v. S-B Power Tool , 75 F.3d 362 , 364-65 (8th Cir.), cert. denied , 117 S. Ct. 274 (1996)
. The distri ct court assumed that Birchem could make out a prima faci e case under the ADA but concluded that he had no evidence that Wentz’s nondiscriminatory business-12-

re asons for demanding Birchem’s resignation were a pretext for disability discrimination. We agree.

Birch emalleges that Wentz’s stated reasons fo r term ination were that Birchem “could no longer b e trusted” -- what Wentz called the irretrievab le breakdown in their w orking relationship -- and because Birchem did not meet K OC’s minimum production requirements after two yea rs as a field agent. These are business reason s havi ng nothing to do with Birchem’s alleged disability
. As evid ence of pretext, Birchem points to the fact tha t KOC renewed his Field Agent Contract in July 1992, and to the fact t hat Birchem ranked higher than two other Wentz fiel d agents on certain KOC field agent reports
. However , this is not evidence of pretext. Moreover, i f Birchem di d have bona fide evidence of pretextual action by Wentz, it would tend to prove that Wentz f ired Birchem becau se he complained of Wentz’s improper trad e pract ices, not because of Birchem’s bipolar disorder
. See Rothmeier v. Investment Advisers, Inc. , 8 5 F.3d 1328, 1337 (8th Cir. 1996). In these circumstances, th e district court properly granted summary judgmen t dism issing Birchem’s ADA claims against both KOC an d Wentz.
II. Birchem’s Pendent Claims. A. Th e North Dakota Human Rights Act Claim . Unde r th e NDHRA, “[i]t is a discriminatory practice for a n-13-

employer t o . . . discharge an employee . . . because of

. . . physical or mental disability.” N.D.C.C. § 14

- 02.4 -03. “‘Employee’ means a person who perform s ser vices for an employer, who employs one or mor e indi viduals, for compensation, whether in the form o f wage s, salaries, commission, or otherwise.” N.D.C.C. § 14-0 2.4-02(5). In construing this statute, the Suprem e Court of North-14-

Dakota generally follows federal court decisions unde r analogous federal anti-discrimination statutes. Se e Schu macher v. North Dakota Hosp. Ass’n , 528 N.W.2d 37 4 (N.D. 1 995); Moses v. Burleigh County , 438 N.W.2d 18 6 (N.D. 1989 ). Birchem cites no authority suggesting that the Court would construe the NDHRA as protectin g inde pendent contractors or would decline to apply th e common law agency test in distinguishing betwee n employees and independent contractors. Therefore, th e distr ict court’s grant of summary judgment dismissin g this claim against KOC is affirmed.
However, as we have explained, Wentz is not entitled to summary judgment on the employee question, and whe n we turn to the district court’s alternative ground of no pretext, we confront a problem in applying st ate law. In Schw eigert v. Provident Life Ins. Co. , 503 N.W.2d 225 , 227-29 (N.D. 1993), the Supreme Court of North Dakot a de clined to follow St. Mary’s Honor Center v. Hicks , hold ing instead that proof of plaintiff’s prima faci e case u nder the NDHRA shifts to defendant the burden t o pro ve it did not engage in the alleged employmen t discrimination. Proof of pretext, in other w ords, is not part of the NDHRA plaintiff’s summary judgment burden.

“In m ost cases, when federal and state claims ar e joined and the federal claims are dismissed on a motio n for summary judgment, the pendent state claims ar e-15-

dismissed wihout prejudice to avoid ‘[n]eedle ss decisions of state law . . . as a matter of comity and to promot e justice between the parties.’” Ivy v. Kimbro ugh , No. 96- 1417, slip op. at 4-5 (8th Cir. May 22, 1997), quotin g United Mine Workers v. Gibbs , 383 U.S. 715, 726 (1966)
. Beca use discovery was completed and the case ready fo r trial, the district court did not abuse its d iscretion in ta king up and granting summary judgment on issues o f state law on which there was little basis for dispute
. But weIf Birchem had avoided summary judgment on his ADA claim against 3 Wentz, it is difficult to envision how that claim could be tried to a jury consistent with Hicks along with a pendent NDHRA claim in which the jury must be instructed that defendant has the burden of proof. Thus, in future cases, if a North Dakota employment discrimination plaintiff is entitled to a jury trial on his or her federal claim(s), the federal court should consider dismissing any pendent or supplemental claims under the NDHRA before trial. See28 U.S.C. § 1367(c)(4). Of course, to avoid this quandary, North Dakota plaintiffs are free to assert claims only under the state statute in state court, or in federal court if there is diversity jurisdiction. -16- have now encountered novel issues under the NDHRA tha t may require trial and therefore conclude that Birchem’ s NDHR Aclaim against Wentz should be dismissed withou t prejudice. 3

B. Th e Retaliation Claim. Under North Dakota la w (and the law of most other States), an employer may no t disc harge even an at-will employee for reasons contrar y to a clear public policy evidenced by a const itutional or statutory provision. Ressler v. Humane Soc’y , 480 N.W.2d 429, 431-32 (N.D. 1992); Krein v. Marian Manor Nursin g Home , 415 N.W.2d 793, 795 (N.D. 1987). We ar e unaware of any decision that has extended this doctrine to includ e independent contractors. See McNeill v. Secu rity Benefit Life Ins . Co. , 28 F.3d 891, 893 (8th Cir. 1994 ) (considering a similar claim under Arkansas law)
. Birc hemconceded in the district court that hi s reta liation claim fails if he was an independen t contractor. Thus, the district court correct ly dismissedThis decision is buttressed by N.D.C.C. § 34-01-20(1), a 1993 statute that 4 codified the public policy exception but expressly limited its protections to employees. -17- Birchem’s retaliation claim against KOC. However , 4 because the employee-18-

issu e is unresolved as to Wentz, Birchem’s penden t retaliationclaim against Wentz should have bee n dismissed without prejudice.

C. The Breach of Contract Claim. The documen t defining KOC’s production requirements for field agent s states tha t, “Field Agents who, after their second year, have produced less than the $10,000 [requirement] and a minimum of 50 life sales to members, for two consecutive year s, will be terminated by their General Agent. ” Birchem alleges (i) that he met this minimum requirement; (ii) that Wentz terminated Birchem for productio n deficienci es; and (iii) that Wentz therefore breached an oral promise, made when recruiting Birchem, that th e Field A gent Contract would not be terminated so long a s Birchem met his minimum production requirements.

The Field Agent Contract expressly provided that i t may“ be terminated by any of the three parties, for an y reason, at any time by mailing written notice to the last kn ownaddress of the other two parties.” Under Nort h Dakota law, “[t]he execution of a contract in writing
. . . supers edes all the oral negotiations or stipulations
conc erning its matter which preceded or accompanied th e execution of the instrument.” N.D.C.C. § 9-0 6-07. Thus,
we agree with the district court that the expres s language of the Field Agent contract is controlling an d mayn ot be altered by any prior oral assurances. Se e-19-

Hill esland v. Federal Land Bank Ass’n , 407 N.W.2d 206 , 211 (N. D. 1987); Wadeson v. American Family Mut. Ins
. Co. , 34 3 N.W.2d 367, 371 (N.D. 1984). Summary judgmen t was proper for both defendants.

D. Intentional Infliction of Emotional Distress . Birc hemargues that the district court erred i n di smissing his claim for intentional infliction o f emotional-20-

distres s. Under North Dakota law, this cause of actio n is “narrow ly limited to outrageous conduct which exceeds all possible bounds of decency.” Muchow v. L indblad , 435 N.W.2d 918 , 924 (N.D. 1989). We agree with the district court t hat Wentz’s conduct in this case falls far shor t of the dis criminatory harassment inflicted upon a female offi ce manager in Swenson v. Northern Crop Ins., Inc. , 498 N .W.2d 174 (N.D. 1993). Even if Wentz confronte d Birchemand forced his resignation in part to ste m Birc hem’s outspoken criticism, this conduct does no t “exceed all possible bounds of decency.”

The case is remanded to the district court wit h instructions to modify its final judgment so as t o dismiss Birchem’s NDHRA and retaliation claims agains t Wentz without prejudice. As so modified, the judgment is affirmed.
A true copy.

Attest:
CLERK, U. S. COURT OF APPEALS, EIGHT H CIRCUIT.