FARMERS INSURANCE EXCHANGE: WAGE & HOUR VIOLATIONS

Case/Settlement Update – August 2010:

In March 2010 the Minnesota Court of Appeals agreed to a request by the parties to “Stay” the Milner appeal action, pending the outcome of ongoing settlement discussions in the multi-district/MDL case before the U.S. District Court of Oregon.  The parties in the MDL agreed to a Stipulation of Settlement in early April, and the proposed settlement received preliminary approval from the Oregon Court in May.  Final approval of that settlement was granted on August 23, 2010.

The MDL lawyers will likely dismiss the Milner appeal in Minnesota within 30-45 days of the date of the MDL final approval order.  At that point, we should be able to begin the process of distributing Milner settlement funds and would anticipate completing that process before the end of 2010.

January 2010 Update:

In mid-December 2009 a Notice of Appeal was filed on behalf of class members who objected to Court’s Order granting final approval, officially blocking distribution of the settlement funds at this time. The appeal process will include the submission of supporting briefs by both parties and oral arguments before the Minnesota Court of Appeals. No official briefing schedule has yet been set. When more scheduling information is available, we will post additional updates on this page.

Settlement:

In June 2009 the parties appeared before the Honorable Gary Larson in Hennepin County District Court to request preliminary approval of a settlement that had been reached by the parties. Judge Larson granted that approval and ordered that the class be notified of the settlement.

• Click here to view the Settlement Agreement and Release of Claims.
• Click here to view the Class Notice

On August 31, 2009, the Court held a hearing on the Motion for Final Approval of the proposed Settlement. On October 28, 2009, the Court signed an Order granting Final Approval to the Milner class settlement, and entered Judgment of same on October 29.

• Click here to view the Order granting Final Approval to the Class Action Settlement
• Click here to view the Notice of Entry of Judgment

If no one appeals the Final Judgment, settlement payments will be made between sixty-one (61) and one hundred and six (106) days after Judgment was entered. If an appeal is taken, no payment will be made until after the appeal is decided.

Background:

On December 16, 2002, the Court entered an order, certifying Gary Milner, et al. v. Farmers Insurance Exchange, et al. as a Class Action. Notice to all potential class members was approved by the Court on March 3, 2003 and will be mailed on March 15, 2003.

If you have worked as a claims adjuster for Farmers Insurance Exchange in Minnesota you may qualify to participate in this lawsuit. The court has certified the following class:

Current and former employees of Farmers Insurance Exchange ("FIE") who (a) are or have been at any time since October 3, 1998, employed as personal lines Claims Representatives, APD Claims Representatives, Senior Claims Representatives, Senior APD Claims Representatives, Special Claims Representatives, or Special APD Claims Representatives by a FIE office in Minnesota; (b) worked more than 38-3/4 hours in a workweek during this time period; (c) were classified by FIE as exempt from overtime pay requirements during this period and (d) have not commenced a separate lawsuit to recover unpaid wages or consented in writing to join the federal multidistrict litigation, unless the consent to join the federal action is formally withdrawn by May 1, 2003.

04.08.05: After a 3-week jury trial that found Farmers Insurance Exchange had violated the MN Fair Labor Standards Act, the Court issued a Final Judgment, including fines and an injunction. Read the Press Release.

Multi-District Litigation

There is also another similar action seeking unpaid overtime pending in Federal District Court in Oregon, entitled In re Farmers Insurance Exchange Claims Representatives' Overtime Pay Litigation, MDL No. 1439 (the "MDL action"). The MDL action is presided over by the Honorable Robert E. Jones. A trial in the MDL action took place in September, 2003. Some of the issues that were tried in the MDL action were substantially similar to those at issue in the Milner action. Judge Jones rendered a verdict in the MDL action on November 6, 2003.

The Order is an extensive and detailed 57 page opinion. In summary, the opinion found that:

1) Farmers Insurance Exchange ("FIE") violated the Fair Labor Standards Act of 1938 ("FLSA") and state overtime compensation laws in failing to pay overtime to APD claims representatives ("CR's"), lower-level property CR's and certain Foremost and Multi-Line CR's;

2) FIE did not violate the FLSA and state overtime compensation laws in failing to pay higher level property CR's, liability CR's and certain other Foremost and Multi-line CR's overtime;

3) FIE failed to prove that the following CR's were exempt from overtime:

a. APD CR's - Those who handle "auto physical damage claims" not involving personal injury;

b. Lower Level Property Claims CR's;

c. Foremost CR's - Those who handle claims arising out of foremost policies. Foremost policies cover, among other things, mobile homes, recreational vehicles, travel trailers, motorcycles, antique automobiles, off-road vehicles, and certain watercraft.; Judge Jones further restricted the eligible Foremost CR's to individuals "who spend 38 3/4 hour or more per week handling property-type losses not involving bodily or personal injury or death, that average, on a monthly basis, less than $3,000."

d. Multiline CR's - Those who handle more than one of the identified types of claims.

Judge Jones again restricted the eligible Multiline CR's to individuals "who spend 38 3/4 hour or more per week handling APD claims in any amount and/or property losses that average, on a monthly basis, less than $3,000."

Judge Jones determined that the claims representatives identified in a-d above will be entitled to overtime pay, liquidated damages, and waiting time penalties as provided under FLSA. However, Judge Jones limited the damages only to those incurred after September 12, 2001.

What Can You Do?

If you would like more information, or would just like to talk with a lawyer experienced in this litigation, please call 1.800.755.0098 for a free consultation or click here to fill out an online free case review.