Appeals Court Adjusts Overtime Rules for Insurer’s Employees

Government Employees Insurance Corp., the Berkshire Hathaway Inc. unit known as GEICO, does not have to pay overtime to its auto damage adjusters, a federal appeals court ruled.

A three-judge panel for the U.S. Court of Appeals for the District of Columbia on Tuesday, January 5, made the ruling in overturning a trial court finding in the consolidated cases of Jerome Robinson-Smith v. Government Employees Insurance Corp. and Christine Lindsay v. Government Employees Insurance Corp.

The plaintiffs sued GEICO seeking overtime pay under the Fair Labor Standards Act of 1938. The act typically requires time-and-one-half pay for working more than 40 hours per week.

GEICO considers auto adjusters exempt. But the plaintiffs, who were joined by hundreds of others, argued that adjusters do not exercise sufficient discretion and independent judgment to qualify as employees exempt from overtime pay.

In December 2008, the trial court agreed and granted summary judgment for the plaintiffs, court records show.

But the appeals court agreed with GEICO, saying in the recent ruling that the primary duty of GEICO auto damage adjusters involves exercising discretion and independent judgment.

The appeals court remanded the case and directed the court to rule for GEICO and conduct further proceedings.

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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