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A California federal judge recently certified a collective misclassified employee lawsuit brought forward by 300 Farmers Insurance claims investigators, alleging various employment law violations. The investigators alleged they were misclassified as exempt from overtime wages, and as a result were underpaid.
This misclassified employee lawsuit is being overseen by U.S. Magistrate Judge Elizabeth D. Laporte. Judge Laporte stated she would allow the plaintiff party to send notices about this collective action lawsuit to three employee groups: special investigators, senior special investigators, and general special investigators.
Each of these notices will give the members of these special investigator groups the option of opting into participation in this employee rights lawsuit. Judge Laporte found the groups were “similarly situated” and that they met sufficiently proved the commonalities between the group.
Along with similar occupational duties, each claim investigator was allegedly classified as exempt and often worked overtime hours without receiving overtime pay.
Judge Laporte initially hesitated to include “desk investigators” in the misclassified employee lawsuit, as these employees generally never left the office to do field work and therefore were less likely to qualify as non-exempt. The judge ultimately decided to include them, reasoning that erring on the side of inclusion would be more appropriate for conditional certification.
Overview of Misclassified Employee Lawsuit
The misclassified employee lawsuit was filed in January 2017 by claim investigators and plaintiffs David Deluca and Barry Francis, alleging they were misclassified as non-exempt from overtime wages.
The investigators point out Farmers has previously faced similar allegations, but the company still allegedly persists in the wrongful misclassification. Francis and Deluca explain that while they and other investigators regularly work to determine if insurance claims are true or fraudulent and writes reports based on the results, they were allegedly classified as non-exempt.
At all times relevant, Francis and Deluca and other investigators say, they did not have the authority to make any “independent judgment” or any other important decisions, which might support their classification as administrative employees and therefore exempt from overtime benefits. While the investigators are paid a salary, they still work over 40 hours a week, they claim.
The plaintiffs argue this alleged misclassification directly violates state and federal labor laws, which protect non-exempt employees’ rights to overtime benefits. Farmers Insurance offers coverage for homes, cars, and commercial entities, and has reportedly faced criticism for employee misclassification before.
According to a 2007 misclassified employee lawsuit, a Minnesota federal court concluded the insurance company had reportedly misclassified investigators as exempt. However, even with this previous ruling, Farmers allegedly failed to update its policy to correctly classify employees.
Judge Laporte recently trimmed the Class of “national investigators,” excluding investigators who investigated complex fraud schemes and organized crime after finding their roles in the company had not been sufficiently discussed.
This decision was made based on the concerns the Farmers litigation team. The attorneys were concerned that allowing employees with “similar positions” in the Class was too vague and added no value. The plaintiffs’ attorneys stated of all the claim investigators that “in general they do the same work, but we don’t have any evidence of that.”
The plaintiffs manages to successfully get the desk investigators included in the misclassified employee lawsuit, stating that separating field and desk investigators would be making “a distinction without a difference.”
This Misclassified Employee Lawsuit is David Deluca, et al. v. Farmers Insurance Exchange, et al., Case No. 3:17-cv-00034, in the U.S. District Court for the Northern District of California.
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