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| | California Supreme Court Overrules 2007 Appellate Court Ruling Stating Claims Adjusters Are 'Non-Exempt' Employees Entitled To Overtime Pay
By Lonce LaMon - January 2, 2012
Last week, the California Supreme Court overruled on a 2007 California appellate court ruling that stated claims adjusters are not exempt from laws demanding they be paid overtime wages.
The rulings were borne out of a class action suit filed by workers’ compensation claims examiners at Liberty Mutual and Golden Eagle Insurance (owned by Liberty). The action alleged that Liberty Mutual and Golden Eagle misclassified their examiners as “exempt” when they should be classified as “non-exempt”, and therefore be entitled to overtime pay.
The ongoing debate over whether workers’ compensation claims adjusters are “administrative” or “productive” workers continues in a tug-of-war exchange of arguments. Another class action suit was filed by workers’ comp examiners in 2008 against AIG Domestic Claims, Inc. in Costa Mesa, and a settlement was negotiated in mediation in 2009. Now, that settlement was just upheld on December 19th, just two weeks ago, by a California appellate court.
What the California Supreme Court basically stated in its very recent ruling is that the 2007 appellate court analysis was wrong. The appellate court ruled that the undisputed facts showed claims examiners engaged in work that falls predominantly on the production side of the administrative/production dichotomy, and that none of their work was carried out at a level of management policy or general operations. But the California Supreme Court stated this is an improper evaluation of the situation. It therefore remanded the case with directions for the lower courts to apply the proper legal standards it laid out.
The Supreme Court further expressed that the majority put their own spin on the administrative/production worker dichotomy, and used that rather than apply the language of the relevant wage order and regulations.
lonce@adjustercom.com
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