NEW YORK — Telephone claims adjusters for Government Employees Insurance Co. (GEICO) will get a second chance at their collective action overtime pay lawsuit. The Second Circuit Court of Appeals disagreed with the district court’s findings, reversed the summary judgment order, and remanded the case back to the lower court for trial. The claims adjusters allege the insurance company misclassified them as exempt under the Fair Labor Standards Act (FLSA) which meant they were wrongfully denied overtime wages.
The Claim History
At the time of the lower court’s decision, 302 GEICO employees had opted into the collective action. The employees were insurance claims adjusters who were classified as exempt under the FLSA’s administrative exemption. The administrative exemption addresses employees with independent decision making authority and discretion in matters related to general business operations and other matters of significance.
GEICO claimed the claims adjusters were exempt because, as telephone claims adjusters, their job was to evaluate policyholder phone calls to determine which portion, if any, of the accident claim GEICO would cover. The company claims this required both discretion and independent decision making which could greatly affect the company. The district court agreed with GEICO and granted the company’s request for summary judgment.
Court of Appeals
The Second Circuit three-judge panel found there to be a legitimate conflict and questions regarding the nature of the claims adjusters’ duties. The panel was not clear as to whether or not the claims adjusters performed enough tasks with sufficient discretion and independence to meet the administrative exemption requirements. According to the panel’s ruling, many of the decision making tasks the claims adjusters performed were actually performed by a computer program, ClaimIQ.
The claims adjusters would input information from the phone call into the program that would then calculate the amount GEICO would cover. It was unclear how much independence the adjusters had in offering settlements. And there was also some question as to how much oversight and supervision the claim adjusters had. These questions, the panel determined, should be decided by a jury.
Summary Judgment
The district court in this case granted GEICO’s motion for summary judgment, which led the claims adjusters to this appeal. A summary judgment order is issued when the court determines that there are no factual questions in the case and the court has sufficient information to make a final ruling without going to trial. The court looks to the evidence provided by both parties in making this decision. Typically, if summary judgment is granted it results in the termination of the lawsuit.
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