- 901
Yes they are
Short version. UHC invoked Sec. 5.2 to terminate agents effective 12/31. What provision did they invoke to stop paying renewal commissions?
None, because there isn't one!
They cannot just make up new provisions out of thin air. They MUST comply with the terms of the contract they agreed to!
Sec 5.9b relates specifically to terminations pursuant to 5.2, in which case UHC "will continue to pay Agent compensation...."
While there are several counter provisions that seemingly allow UHC to stop paying all renewal commissions, under contracts of adhesion, any conflicts must be resolved in favor of the party with little or no bargaining power, i.e., the agent.
To that end, Sec 6.1 requires "good faith negotiation" by both parties to resolve any disputes. UHC has not acted in good faith; in fact, it has acted in bad faith. This works against UHC and in favor of agents. In addition, contract law imposes numerous covenants upon parties to a contract, including a covenant of good faith, which UHC has breached here.
There are several other persuasive legal arguments available that I am omitting for purposes of brevity and clarity.
While anyone impacted by this unprecedent move should consider filing a complaint with the Commissioner, no one should take any action against UHC without first seeking competent legal advice from an experienced licensed attorney. None of the legal theories provided herein should be construed as offering legal advice. As an impacted agent myself, I am merely sharing my own thoughts as to how I am planning to proceed myself.
That being said, I would not be surprised to see UHC have something akin to a change of heart over the next few weeks, at least to some degree. But even that, if it comes to fruition, should not pacify agents. Indeed, if a well qualified eager beaver lawyer were to be presented with this case, it could represent cash damages to UHC in the tens of millions of dollars.
