GEICO Overtime Lawsuit Moves Forward

GEICO Overtime Lawsuit Moves Forward

In October 2011, a federal judge in New York upheld a magistrate's decision to certify a collective action lawsuit brought on behalf of current and former claims examiners employed by Government Employees Insurance Co. (GEICO), a Berkshire Hathaway Inc. subsidiary. The suit alleges that GEICO refused to pay the claims examinersovertime.

Candace Harper originally filed the lawsuit in 2009. Harper, a resident of Nassau County, New York, worked for GEICO as a Telephone Claims Representative from late 2004 to 2009. According to the complaint, while working at GEICO she routinely worked in excess of 40 hours each week. However, Harper alleged that she frequently did not receive proper overtime compensation, in violation of the Fair Labor Standards Act ("FLSA"). The FLSA's overtime provisions require that those who work more than forty hours per week be compensated at a rate of one and one-half times their regular rate of pay. The lawsuit alleges that GEICO's standard policy was to avoid properly paying a segment of its employees for their overtime hours. This segment of employees included claims representatives, customer service representatives, liability examiners, and similar employees with different titles.

GEICO sought a dismissal of the case, asserting that Harper and the class members' employment fell within a statutory exemption from the FLSA's requirement that overtime compensation be paid. The FLSA exempts employees "employed in a bona fide executive, administrative, or professional capacity" from its minimum wage and overtime provisions. Harper argued that she was not subject to the administrative exemption because her job required little skill or independent judgment, and she had no authority to hire or fire subordinate employees or other managerial responsibilities. In her capacity as a Telephone Claims Representative, Harper spoke with individuals making claims against GEICO's insurance policies. However, Harper alleged that when dealing with claimants, she "followed a script of questions and specific instructions mandated by GEICO's computer claims system called 'Claims IQ.'" Since the Second Circuit has indicated a very narrow interpretation of the FLSA administrative exemption, the federal court rejected GEICO's efforts to have the case dismissed.

GEICO also attempted to appeal the Magistrate Judge's order granting the claims examiners conditional collective action certification. The federal court overruled GEICO's appeal, stating that the Magistrate Judge had used the proper legal standard for certification. GEICO had claimed that since some discovery had been completed in the case, the Magistrate Judge erred in granting conditional certification. However, the court held that because "not all discovery [had] been completed, the Magistrate Judge used the proper legal standard to the assessment of whether a collective action should be conditionally certified."

GEICO's appeal also claimed that a more stringent post-discovery analysis would have revealed that the opt-in plaintiffs were not similarly situated as required for certification under the FLSA. The court explained that the decision to grant certification in the Second Circuit was a two-step process. First, the court decides whether to send "opt-in" notices to potential employees who are similarly situated to the plaintiff and therefore may be class members. Second, the court determines whether those employees who have opted-in are, in fact, similarly situated. The court found that the employees who had opted in all used the same claims manual and the same "Claims IQ" program. In affirming the certification, the court held that those "showings are sufficient to support conditional collective action certification at this point in the proceeding."

The employees suing GEICO estimate damages at more than $5 million, but there is no precise estimate because GEICO does not keep legally required records that would allow the amount of back pay to be determined, according to the lawsuit.

If you believe you are not being properly compensated for working overtime, you may be entitled to additional compensation. For more information, you should contact aMissouri overtime lawyer.

Categories: