Jury Socks It to Farmers over Overtime Imbroglio
By John Millrany - July 11, 2001A surprisingly large verdict slapped against Farmers Insurance Exchange for alleged cheating of claims adjusters over disputed overtime-hours issues could benefit 2,400 adjusters in a class action judgment handed down July 10 by an Alameda County Superior Court jury.
The Los Angeles-based Farmers promptly said it would appeal the $90 million award, which could grow to more than $130 million given interest and attorneys’ fees.
Victory for the claims adjuster could be very sweet indeed in a case that has fermented over the last five years—and a case which Farmers surprised analysts by opting not to settle out of court and going for a trial-by-jury instead.
Observers across the state said they were caught napping as to the size of the judgment. The case could further impact, precedentwise, many other state employers who are embroiled in similar overtime legal squabbles. (For example, coffeehouse giant Starbucks is in the gunsights of several of its litigation-minded managers.)
Claims adjusters aren’t the only ones—untold thousands of workers have long groused about putting in overtime and not being adequately compensated. The issue centers on exempt vs. non-exempt (white collar/blue collar). In any case, the outcome of this latest contest could affect virtually every claims adjuster in California.
"This is a long-awaited vindication of these workers’ rights to overtime pay," observed Steven Zieff, case counsel of the law firm Rudy, Exelrod & Zieff. "Farmers has, and continues, to deprive their workers of their statutory overtime protection—a fundamental public policy in California.
"The jury has spoken," Zieff continued. "In rejecting Farmers’ lowball request that they pay $67.5 million as the overtime fund, the jury has made it clear that these workers should be paid for all of the unpaid overtime hours that they put in Farmers’ benefit and should not be short changed. This sends a message to Farmers and other employers that flagrantly violate the overtime laws that these laws can and will be enforced."
In a survey prepared for the trial that began last June 26, the typical Farmers adjuster pulls down about $30,000 annually based on a 50-hour week, Zieff explained. If the jury award as presently stipulated plays out, each plaintiff would be compensated approximately $37,500 (based on such factors as tenure).
Rose Bell was the named plaintiff in the case (Bell vs. Farmers Insurance Exchange, Alameda S. Ct. No. 774013) and had this comment following yesterday’s verdict: "I have been fighting this battle for more than five years now, and feel exhilarated and pleased that the jury ruled so overwhelmingly in our favor."
Meanwhile, the following information was issued in a Business Wire news release yesterday:
"Throughout the 73 years of its existence, Farmers (a member of Farmers Insurance Group of Companies) has consistently believed it was correctly following all applicable state and federal laws, including those relating to the classification of its professional adjusting force as exempt from overtime, rather than hourly non-exempt workers.
"Farmers has hired and trained thousands of such valued employees over the years. The issue of the proper classification of such employees as either exempt or non-exempt is one which Farmers hopes will be clarified in this case by the California Supreme Court. It is a vial subject, which affects thousands of adjusters employed by Farmers and hundreds of other insurance companies.
"Field claims adjusters such as those involved in the Bell case have historically been treated as exempt employees throughout the country. The verdict in this case has the effect of setting California adjusters apart form their peers in other states."
(adjustercom.com welcomes comments from our readers who want to chime in on this or any other topic, e.g., California has peers?)
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