The misclassification of insurance claims adjusters led to a California class action lawsuit. The seven plaintiffs in the case prevailed after a long, embittered legal battle. The plaintiffs were former claims adjusters for Liberty Mutual Insurance Company who filed for the recovery of unpaid overtime as well as related penalties.
The description of the legal battle that ensued as “long” and “embittered” is unarguable. The litigation took thirteen years. Litigation was intense and many say, exhaustive, but a settlement was finally secured for the plaintiffs - Liberty Mutual agreed to a settlement amount of $65 million to compensate more than 1,600 claims adjusters (current and former) for unpaid overtime compensation.
Timeline of Events: California Claims Adjusters Class Action Lawsuit
May 2004: Trial Court granted plaintiffs’ motion for class certification. Representation was appointed for the class.
Early 2005: Discovery completed and plaintiffs move for summary adjudication on defendants’ affirmative defense that plaintiffs and class members were exempt from overtime pay under California labor law. Defendants counter with a motion to decertify the class and two motions for summary judgment.
October 18, 2006: Trial court issued a decision granting in part the defendants’ motion to decertify and denying the plaintiffs’ motion for summary adjudication regarding the liability issue.
August 16, 2007: Court of Appeal issued its first decision that granted plaintiffs’ motion for summary adjudication and denying defendants’ motion to decertify class.
December 29, 2011: California Supreme Court granted defendants’ petition for review and found that the Court of Appeal applied the wrong legal standard and remanded the case to the Court of Appeal for additional proceedings.
July 23, 2012: After the case returned to the Court of Appeal where they again ruled in the plaintiffs’ favor. They found that defendants were liable for unpaid overtime and that the trial court erred in decertifying the class. Defendants sought review by the California Supreme Court, but they declined to hear the defendants’ petition. This left the plaintiffs’ victory intact.
September 2012: The case returned to trial court where the defendants’ counsel argued that the Court of Appeal’s decision was not binding on the trial court.
June 2013: Prior to resolution, parties agreed to resolve all claims in exchange for $65 million settlement from Liberty Mutual.
June 2014: Court granted final approval of the settlement with no objections from class members.
This outcome combined with the size of the recovery is especially notable in light of the fact that over the past 10 years, almost every other court hearing similar cases involving misclassification of insurance claims adjusters found in favor of the defendants.
For more information on California employment law or California class action lawsuits, contact Blumenthal, Nordrehaug & Bhowmik.