United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 96-2294

___________

Keith Birchem, *

*

Plaintiff - Appellant, *

* Appeal from the United

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,

breach of contract, retaliatory discharge, and

intentional 
The HONORABLE RODNEY S. WEBB, Chief Judge of the United States 1

District Court for the District of North Dakota.

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infliction of emotional distress. The district court1

granted summary judgment primarily on the ground that

Birchem was an independent contractor, not an employee.

We affirm.

Knights of Columbus (“KOC”) is a non-profit fraternal

benefit society that offers life insurance and annuities

to members of the Catholic Church. Daniel N. Wentz is

KOC’s general insurance agent in eastern North Dakota.

In July 1988, Wentz appointed Birchem a KOC field agent,

granting him the exclusive right to sell KOC policies to

members of four Catholic churches. The appointment was

reflected in a Field Agent Contract between KOC, Wentz,

and Birchem. The contract was renewed in 1990 and 1992.

During two of his years as a KOC field agent, Birchem

was Wentz’s lowest producer, and Birchem never placed

better than sixth out of eight Wentz agents in overall

performance. Even in his best year, Birchem received a

letter from KOC warning that his production had fallen

below the minimum needed to retain pension and health

benefits. Two agents with performance histories similar

to Birchem’s resigned during this period. In the summer

of 1992, Birchem began looking for a new position,
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speaking with general agents for several other insurers

and investigating the purchase of an independent agency.

That fall, the Wentz field agents attended a joint

conference with KOC agents from Minnesota. Birchem told

other field agents that Wentz was encouraging agents 
-4-

to engage in improper competitive practices. Birchem

also said that he no longer wished to work for Wentz and

was looking for another position. Wentz and Birchem met

on October 12 to discuss Birchem’s comments. Birchem

told Wentz that he felt uncomfortable coming to the

office and had lost all respect for Wentz because of his

marketing practices. Wentz said that he felt that his

relationship with Birchem was irretrievably damaged. In

early November, Wentz told Birchem to resign or be fired.

Birchem resigned on November 5 and began working for a

competing insurer one month later. 

Birchem filed this wrongful termination suit,

claiming that he was constructively discharged in

violation of the Americans with Disabilities Act, 42

U.S.C. § 12112 (“ADA”), and the North Dakota Human Rights

Act, N.D.C.C. § 14-02.4-03(i) (“NDHRA”), because Wentz

would not accommodate Birchem’s disability, bipolar

disorder or manic depression. Birchem also asserted

pendent claims for unlawful retaliation, because Birchem

had accused Wentz of improper trade practices; breach of

an oral contract not to terminate the written Field Agent

Contract so long as Birchem met minimum production

objectives; and intentional infliction of emotional

distress.

At the close of discovery, KOC and Wentz moved for

summary judgment. Both sides filed extensive fact

submissions. At the motion hearing, the district court
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raised an issue not briefed by the parties -- whether

field agent Birchem was an employee or an independent

contractor. The parties submitted additional fact

materials on that issue, and the court then granted

summary judgment in favor of both defendants. It

concluded that Birchem was an independent contractor and

therefore not protected by the ADA, the NDHRA, or the

North Dakota public policy against retaliatory discharge
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of a whistleblower. Alternatively, the court concluded

that Birchem has no evidence of a pretextual discharge.

It dismissed his contract claim because the Field Agent

Contract was terminable at will and may not be varied by

Wentz’s prior oral representations. Finally, the court

held that Birchem could not prove the “extreme and

outrageous conduct” necessary for a claim of intentional

infliction of emotional distress. Birchem appeals each

of those rulings. 

I. Birchem’s ADA Claim.

A. The Employee Issue. Like Title VII, the ADA

protects “employees” but not independent contractors.

See Wilde v. County of Kandiyohi, 15 F.3d 103, 104 (8th

Cir. 1994). The Act defines an “employee” as “an

individual employed by an employer.” 42 U.S.C. §

12111(4). When Congress uses this “completely circular”

definition, courts apply the general common law of agency

to distinguish between protected employees and

unprotected independent contractors. Nationwide Mut.

Ins. Co. v. Darden, 503 U.S. 318, 323 & n.3 (1992). 

In applying the common law of agency test, the

Supreme Court looks at the large number of factors that

define the parties’ total contractual relationship, no

one of which is determinative. See Community for

Creative Non-Violence v. Reid, 490 U.S. 730, 751-53
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(1989), followed in Darden, 503 U.S. at 323-324. The

Court “typically weighs the common-law factors listed in

the Restatement [(Second) of Agency § 220(2) (1958)] and

some additional factors related to the worker’s economic

situation, like how the work relationship may be

terminated, whether the worker receives yearly leave,

whether the worker accrues retirement benefits, and

whether the hiring party 
Consistent 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 social security taxes.” Wilde, 15 F.3d at 105. We

review the ultimate question of employment status de

novo. See Berger Transfer & Storage v. Central States,

S.E. & S.W. Areas Pension Fund, 85 F.3d 1374, 1378 (8th

Cir. 1996). 

We agree with the district court that Birchem and KOC

had an independent contractor relationship. First, each

Field Agent Contract expressly provided that “[n]othing

contained in this Agreement shall be construed to create

the relationship of employer and employee between” KOC

and Birchem, KOC and Wentz, or Wentz and Birchem.2

Second, the parties’ financial relationship strongly

suggests Birchem was an independent contractor. He was

paid on a commission basis, KOC did not withhold income

taxes from his commissions, and Birchem reported his KOC

earnings as income of a self-employed individual for

federal tax purposes. Third, the unrefuted affidavit of

a Vice President in KOC’s Agency Department averred that

KOC does not control a field agent’s daily activities.

Finally, federal courts have consistently held that

insurance agents are unprotected independent contractors,

and Birchem has cited no contrary authority. See, e.g.,

Oestman v. National Farmers Union Ins. Co., 958 F.2d 303
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(10th Cir. 1992) (ADEA); Knight v. United Farm Bureau

Mut. Ins. Co., 950 F.2d 377 (7th Cir. 1991) (Title VII);

United States EEOC v. Catholic Knights Ins. Soc’y, 915 F.

Supp. 25 (N.D. Ill. 1996) (Title VII); Robinson v.

Bankers Life & Cas. Co., 899 F. Supp. 848 (D.N.H. 1995)

(ADA). Although some aspects of KOC’s relationship with

its field agents would be consistent with employment, the

balance of factors clearly supports the district court’s

independent contractor determination.
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Birchem asserts his ADA claim against Wentz, as well

as KOC. Because Wentz and his general agency were

independent of KOC, Wentz might have been Birchem’s

employer even if KOC was not. An important factor in

determining 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 an

affidavit with supporting documents detailing Wentz’s

extensive day-to-day direction and control. Defendants

submitted nothing from Wentz refuting these averrals, and

Wentz’s deposition is laced with language suggesting an

employee relationship. The district court only

addresszed the employee question from the perspective of

Birchem’s relationship with KOC. We conclude that the

summary judgment record raises a genuine issue of

material fact as to whether Birchem was Wentz’s employee

for ADA purposes. Thus, we must turn to the district

court’s alternative ground for granting summary judgment

in favor of Wentz. 

B. The Pretext Issue. In late 1991, when Birchem was

diagnosed with bipolar disorder, he advised Wentz that he

was taking lithium to stabilize his mood swings. Birchem

continued to work and did not ask Wentz to accommodate

this condition. However, he now argues that Wentz

violated the ADA by taking adverse employment action
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because of this disability. Lacking direct evidence of

disability discrimination, Birchem must avoid summary

judgment on this claim by using the burden-shifting

framework 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 district court assumed that Birchem could make out a

prima facie case under the ADA but concluded that he had

no evidence that Wentz’s nondiscriminatory business 
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reasons for demanding Birchem’s resignation were a

pretext for disability discrimination. We agree.

Birchem alleges that Wentz’s stated reasons for

termination were that Birchem “could no longer be

trusted” -- what Wentz called the irretrievable breakdown

in their working relationship -- and because Birchem did

not meet KOC’s minimum production requirements after two

years as a field agent. These are business reasons

having nothing to do with Birchem’s alleged disability.

As evidence of pretext, Birchem points to the fact that

KOC renewed his Field Agent Contract in July 1992, and to

the fact that Birchem ranked higher than two other Wentz

field agents on certain KOC field agent reports.

However, this is not evidence of pretext. Moreover, if

Birchem did have bona fide evidence of pretextual action

by Wentz, it would tend to prove that Wentz fired Birchem

because he complained of Wentz’s improper trade

practices, not because of Birchem’s bipolar disorder.

See Rothmeier v. Investment Advisers, Inc., 85 F.3d 1328,

1337 (8th Cir. 1996). In these circumstances, the

district court properly granted summary judgment

dismissing Birchem’s ADA claims against both KOC and

Wentz.

II. Birchem’s Pendent Claims.

A. The North Dakota Human Rights Act Claim. Under

the NDHRA, “[i]t is a discriminatory practice for an
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employer to . . . discharge an employee . . . because of

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

02.4-03. “‘Employee’ means a person who performs

services for an employer, who employs one or more

individuals, for compensation, whether in the form of

wages, salaries, commission, or otherwise.” N.D.C.C. §

14-02.4-02(5). In construing this statute, the Supreme

Court of North 
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Dakota generally follows federal court decisions under

analogous federal anti-discrimination statutes. See

Schumacher v. North Dakota Hosp. Ass’n, 528 N.W.2d 374

(N.D. 1995); Moses v. Burleigh County, 438 N.W.2d 186

(N.D. 1989). Birchem cites no authority suggesting that

the Court would construe the NDHRA as protecting

independent contractors or would decline to apply the

common law agency test in distinguishing between

employees and independent contractors. Therefore, the

district court’s grant of summary judgment dismissing

this claim against KOC is affirmed. 

However, as we have explained, Wentz is not entitled

to summary judgment on the employee question, and when

we turn to the district court’s alternative ground of no

pretext, we confront a problem in applying state law. In

Schweigert v. Provident Life Ins. Co., 503 N.W.2d 225,

227-29 (N.D. 1993), the Supreme Court of North Dakota

declined to follow St. Mary’s Honor Center v. Hicks,

holding instead that proof of plaintiff’s prima facie

case under the NDHRA shifts to defendant the burden to

prove it did not engage in the alleged employment

discrimination. Proof of pretext, in other words, is not

part of the NDHRA plaintiff’s summary judgment burden. 

“In most cases, when federal and state claims are

joined and the federal claims are dismissed on a motion

for summary judgment, the pendent state claims are
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dismissed wihout prejudice to avoid ‘[n]eedless decisions

of state law . . . as a matter of comity and to promote

justice between the parties.’” Ivy v. Kimbrough, No. 96-

1417, slip op. at 4-5 (8th Cir. May 22, 1997), quoting

United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966).

Because discovery was completed and the case ready for

trial, the district court did not abuse its discretion in

taking up and granting summary judgment on issues of

state law on which there was little basis for dispute.

But we 
If 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. See 28 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. 

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have now encountered novel issues under the NDHRA that

may require trial and therefore conclude that Birchem’s

NDHRA claim against Wentz should be dismissed without

prejudice.3

B. The Retaliation Claim. Under North Dakota law

(and the law of most other States), an employer may not

discharge even an at-will employee for reasons contrary

to a clear public policy evidenced by a constitutional or

statutory provision. Ressler v. Humane Soc’y, 480 N.W.2d

429, 431-32 (N.D. 1992); Krein v. Marian Manor Nursing

Home, 415 N.W.2d 793, 795 (N.D. 1987). We are unaware of

any decision that has extended this doctrine to include

independent contractors. See McNeill v. Security Benefit

Life Ins. Co., 28 F.3d 891, 893 (8th Cir. 1994)

(considering a similar claim under Arkansas law).

Birchem conceded in the district court that his

retaliation claim fails if he was an independent

contractor. Thus, the district court correctly dismissed
This 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. 

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Birchem’s retaliation claim against KOC. However,

4

because the employee 
-18-

issue is unresolved as to Wentz, Birchem’s pendent

retaliation claim against Wentz should have been

dismissed without prejudice.

C. The Breach of Contract Claim. The document

defining KOC’s production requirements for field agents

states that, “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

years, will be terminated by their General Agent.”

Birchem alleges (i) that he met this minimum requirement;

(ii) that Wentz terminated Birchem for production

deficiencies; and (iii) that Wentz therefore breached an

oral promise, made when recruiting Birchem, that the

Field Agent Contract would not be terminated so long as

Birchem met his minimum production requirements. 

The Field Agent Contract expressly provided that it

may “be terminated by any of the three parties, for any

reason, at any time by mailing written notice to the last

known address of the other two parties.” Under North

Dakota law, “[t]he execution of a contract in writing .

. . supersedes all the oral negotiations or stipulations

concerning its matter which preceded or accompanied the

execution of the instrument.” N.D.C.C. § 9-06-07. Thus,

we agree with the district court that the express

language of the Field Agent contract is controlling and

may not be altered by any prior oral assurances. See
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Hillesland v. Federal Land Bank Ass’n, 407 N.W.2d 206,

211 (N.D. 1987); Wadeson v. American Family Mut. Ins.

Co., 343 N.W.2d 367, 371 (N.D. 1984). Summary judgment

was proper for both defendants.

D. Intentional Infliction of Emotional Distress.

Birchem argues that the district court erred in

dismissing his claim for intentional infliction of

emotional 
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distress. Under North Dakota law, this cause of action

is “narrowly limited to outrageous conduct which exceeds

all possible bounds of decency.” Muchow v. Lindblad, 435

N.W.2d 918, 924 (N.D. 1989). We agree with the district

court that Wentz’s conduct in this case falls far short

of the discriminatory harassment inflicted upon a female

office manager in Swenson v. Northern Crop Ins., Inc.,

498 N.W.2d 174 (N.D. 1993). Even if Wentz confronted

Birchem and forced his resignation in part to stem

Birchem’s outspoken criticism, this conduct does not

“exceed all possible bounds of decency.”

The case is remanded to the district court with

instructions to modify its final judgment so as to

dismiss Birchem’s NDHRA and retaliation claims against

Wentz without prejudice. As so modified, the judgment is

affirmed.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH

CIRCUIT.