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THE NATION

Massive Award in Overtime Lawsuit

Labor: Jury sides with exempt workers against Farmers Insurance. The $90-million verdict could prompt more suits in California.

July 11, 2001|LISA GIRION | TIMES STAFF WRITER

The suit contended that adjusters are the equivalent of insurance production workers, that they exercised very little discretion and so they ought to be paid overtime. An Alameda judge agreed, and in March an appellate court upheld that ruling.

In its statement, Farmers said it was "disappointed and concerned" about the verdict and hopes the state Supreme Court will take up its appeal.

"It is a vital subject, which affects thousands of adjusters employed by Farmers and hundreds of other companies," the statement said. "Field claims adjusters . . . have historically been treated as exempt employees throughout the country. The verdict in this case has the effect of setting California adjusters apart from their peers in other states."

The company said that by being exempt, the adjusters are able to set their own hours and are treated as professionals.

"Some significant disadvantages to being classified as nonexempt include having to keep time cards, working a regular 9-a.m.-to-5-p.m. schedule, accounting for all hours worked to a supervisor and being treated as an hourly worker rather than a professional," Farmers said.

The statement said the company would "continue to comply with all laws, regulations and court decisions regarding its claims adjusting force, while also seeking final clarification of this important issue through the courts of appeals."

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