FARMERS INSURANCE EXCHANGE: WAGE & HOUR VIOLATIONS

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.

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in writing to join the federal multidistrict litigation, unless the consent to join the federal action is formally withdrawn by May 1, 2003.

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:

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.