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7 Knights of Columbus sue order alleging series of unfair employment practices.

NEW YORK - Seven current and former Knights of Columbus insurance agents have sued the order, alleging a series of unfair employment practices. The suit charges violations of antitrust laws, fraudulent misrepresentation and breach of fiduciary duties.

Filed Jan. 5 in Los Angeles Federal District Court, the suit named Supreme Knight Virgil Dechant and the organization's board of directors.

Knights spokesman Russell Shaw said, "We are quite confident we have not violated any regulations and have acted correctly in all matters."

The suit contends it has been filed on behalf of all Knights agents held under "captive" contract by the order and demands a full public accounting of insurance revenues and activities as well as punitive damages for its clients.

The suit charges the organization has created a monopoly inherent in the restrictive contracts the organization has with its agents. While considered as independent contractors by the Knights, agents' contracts require them, according to the suit, to "devote full time and entire attention and energy to the services required under this contract" and forbid them to engage in "any other occupation or business, except as authorized by the order."

The suit further contends that agents are only authorized to sell in particular regions, and only to members and their families, that they are prohibited to sell to women other than members' wives and are not allowed to offer clients insurance products other than those provided by the Knights of Columbus, even in instances where the Knights do not offer comparable products.

In 1991, the Knights' total revenues earned by insurance sales was $804 million. According to the suit, comparable funds have not been returned to policyholders in dividends or passed on in lower premiums, despite the organization's almost continuous growth and increased revenues over the past decade.

The suit further alleges "insurance premiums are vastly subsidizing the fraternal aspect of the organization, to the detriment of the policyholders," and it charges the organization with unfair pension-plan practices.

The Knights, whose fraternity boasts 1.5 million members worldwide, has $20 billion of insurance currently in force.

Neither Dechant nor Supreme Advocate Patrick Donlin were available for comment last week.
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Author:Piccolino, Alberta
Publication:National Catholic Reporter
Date:Jan 22, 1993
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