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The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.

 

Setting The Record Straight
7/27/01

Farmers has recently circulated statements about this case in the wake of the Court rulings and the jurys verdict against Farmers in the class action lawsuit entitled Bell v. Farmers Insurance Exchange, Case No. 774013-0 in the Alameda County Superior Court. We believe that there are a number of  erroneous and misleading statements that have been circulated by Farmers and we wish to set the record straight.

1. Farmers statements ignore the Orders and Decisions by the Trial
Court and the Court of Appeal that the personal lines claims representatives
are not exempt administrators.

In a July 23, 2001 memo, Farmers stated that it strongly disagrees with the Courts findings that the personal lines claims representatives are entitled to overtime pay for overtime worked. Farmers goes on to suggest that we are confident that the decision will be overturned in the appellate courts and that the Courts have declined to address the issue squarely in the past.


These statements ignore the extensive proceedings in this case - what the Court of Appeal referred to as extraordinarily intense and protracted litigation of every step in this overtime class action. In this case, the Trial Court ruled that the claims representatives are entitled to overtime pay by way of its April 21, 1999 Order. On March 5, 2001, a three-Justice panel of the Court of Appeal unanimously approved in a 28-page decision the trial courts ruling that claims representatives are entitled to overtime pay. In that decision, the Court of Appeal agreed with the Trial Court in ruling that Farmers personal lines claims representatives in California are fully covered by California overtime law:


We therefore conclude that the trial court properly ruled, as a matter of  law, that the Plaintiffs [personal lines claims representatives working in California] were not employed in administrative capacities within the meaning of subdivision 1(A) of Wage Order No. 4.

Bell v. Farmers Insurance Exchange, 87 Cal.App.4th 805, 828. Thus, the courts -- both the Alameda County Superior Court and the California Court of Appeal -- have squarely addressed the issue of whether Farmers personal lines claims representatives in California are entitled to overtime pay for overtime hours worked. The courts rulings make it clear that these personal lines claims representatives are entitled to overtime pay. It is not, as
Farmers suggests, that the courts have declined to address this issue. Rather, the courts have spoken and Farmers doesnt like what they said.


Farmers has taken numerous steps to undo the Courts rulings - all unsuccessful. Farmers has filed a motion for reconsideration, two appellate writs with the Court of Appeals, two appeals to the Court of Appeals, a Petition for Rehearing in the Court of Appeals and a Petition for Review in the Supreme Court. All of Farmers attempts to undo the rulings that
claims representatives are entitled to unpaid overtime have been unsuccessful. The bottom line is that Farmers personal lines claims representatives working in California are entitled to overtime pay.


2. It is time for Farmers to do the right thing.

Farmers has paid lip service to doing the right thing for the right reasons. If Farmers is sincere about that, now is the time. Farmers should honor the statement that it made to the jury at the damages trial in Alameda County Superior Court on July 9, 2001. Farmers told the jury that it wanted the jury to award a fair overtime fund for the claims representatives.
Farmers attorney made the following statement to the jury:

Lets talk about a fair overtime fund. If in this case you were to award too little money, too small of an amount to go into the fair overtime fund, and that would not -- that would be unfair to Farmers claims adjusters and we dont want you to do that. Many of these people still work for us. They are our employees. Were responsible for them. Were responsible to see that they are paid fairly and honestly.

...And we havent suggested to you that you pay them nothing [in overtime] or give them nothing [in overtime pay]. We have suggested that there is an amount which is right, but we dont want you to go below that amount. We want to give you the amount thats right. The amount that you find is right.


These are direct quotes from Farmers closing statement to the jury made on July 9, 2001.


The jury then rendered its verdict. It found that the overtime backpay fund - a fair overtime fund - should be $90,009,208.12. Now Farmers is once again refusing to abide by its obligations and is turning its back on its statements that it wanted to treat the claims representatives fairly. What is amazing about this case is Farmers absolute unwillingness to
acknowledge its legal obligation to pay overtime to its personal lines claims representatives for the long hours that they work, despite repeated Court rulings that Farmers is obligated to pay its personal lines claims representatives overtime pay for overtime worked.


It is now time for Farmers to honor the commitment by paying overtime to its claims representatives and stop the interminable delays and foot dragging in this case. It is time for Farmers to comply with the overtime laws, the decision of the trial court, the decision of the appeals court, and the jurys verdict.


3. The fact that claims representative are entitled to overtime does not in any way compromise Farmers ability to deliver on promises to policyholders.


Farmers has suggested that its ability to deliver on promises to policyholders would be compromised if claims representatives are paid overtime and if time records are kept for personal lines claims representatives. This statement is wrong - legally and factually. Farmers compliance with the overtime laws does not in any way compromise its ability
to deliver on any promises to customers. Farmers must comply with the overtime laws. Claims representatives who worked overtime should be paid for their time. That will not compromise the claims representatives ability to do their job. Indeed, we believe that precisely the opposite is true. Being paid fairly and consistently with the law should improve morale and improve service. In fact, a number of other insurers do pay overtime and have started paying overtime, particularly since this litigation was started and other insurers learned of the Court rulings requiring such overtime payments here.

4. Paying overtime to claims representatives need not affect their job duties or benefits.


Farmers has suggested that job perks - such as flexible time and cars for field adjusters are somehow inconsistent with paying overtime. That is not the case. There is NO LEGAL REASON Farmers cannot continue the current work condition including company cars for field representatives and even provide true flex-time while paying for overtime hours. Working flexible time and working overtime are not inconsistent. Farmers
statements implying the contrary are pure scare tactics.


Farmers attempts to portray its planned continuation of the appeals as somehow necessary to defend the integrity of the job and job benefits of its employees, rather than as a delay tactic designed to avoid paying overtime legally due to its employees. Farmers can best show respect for its loyal work force by paying them the overtime that they deserve and are entitled to under the law instead of intimidating claims representatives.
Suggesting that paying overtime must lead to a lessening of their job duties or job benefits is wrong. The fact that the Trial Court and the Court of Appeal determined that the claims representatives are production workers is in no way intended to undercut or denigrate the job duties performed by the claims representatives. Being a production worker in the context of overtime laws does not mean that the workers are not carrying out their job
duties properly. In the context of overtime laws, production worker is a term distinguishing those employees who carry out the day-to-day activities of the business of the employer -- as claims representatives do -- as opposed to those few employees who set policy or administer the business.

Farmers must pay for the time its personal line claims representatives have worked. It is time for Farmers to stop the delay and begin complying with the overtime laws.

 

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