SAN FRANCISCO — Allstate Insurance Company lost its appeal of a class action overtime pay lawsuit recently. A three judge panel on the Ninth Circuit Court of Appeals ruled that Allstate’s casualty claims adjusters may proceed with their claims against the company. The claims adjusters allege the insurance giant violated California labor law when it failed to pay them for their off-the-clock and overtime work. The class action includes 800 current and former California-based claims adjusters who worked for the company since September of 2006. It is estimated that the lawsuit could cost Allstate more than $200 million in back wages and other damages.
The Adjusters’ Claims
Jack Jimenez, a former claims adjuster, filed the lawsuit in 2010. According to Jimenez, Allstate managers are required to stay within an annual budget, an amount that includes employee overtime pay, and performance evaluations and bonuses were dependent on conforming to the budget. The lawsuit claims this incentivized managers to underreport or not approve overtime pay, thus leading to off-the-clock work without pay. Since only managers can record claims adjusters’ overtime hours, the claims adjusters were prevented from receiving credit for the hours worked and for overtime pay.
The lawsuit also alleges that employee complaints or requests for overtime were seen as performance issues. The claims adjusters also alleged they missed meal breaks, for which they were not compensated, and Allstate failed to pay their wages in a timely manner. The lawsuit failed to gain class certification, and the adjusters were told they must pursue their claims individually.
Written Policy vs. Applied Policy
A company’s best defense against wage violations is to maintain written policies that conform to applicable state and federal labor laws. Yet written policies are only effective when followed and enforced. According to the lawsuit, even Allstate maintained a written policy that conformed to state labor laws, but that policy was not enforced.
If you believe your employer is denying you the hours and overtime you worked, contact our team of overtime pay lawyers today at (855) 754-2795, or complete a Free Unpaid Overtime Case Review form. If we accept your case, we will represent you under our No Fee Promise. You will not be billed for legal fees or other costs unless you receive a settlement.