Miller v. Farmers Insurance Exchange

For more than 50 years, the Department of Labor has considered claims adjusters exempt from the Fair Labor Standard Act’s overtime requirement. In 2004, the DOL promulgated 29 C.F.R. § 541.203 , which it viewed as “consistent with” existing law. Section 541.203 exempts claims adjusters if they perform activities such as interviewing witnesses, making recommendations regarding coverage and value of claims, determining fault and negotiating settlements.

In this case, the plaintiffs are nearly 2,000 former and current claims adjusters who handle, respectively, automobile damage claims, non-automobile property damage claims, personal injury claims and various combinations of these. They assert that their employer improperly classified them as exempt from the FLSA. The district court ruled that some of them are exempt, and some of them are not. In doing so, the district court promulgated a “$3,000 in claims paid per month” rule, a rule that all parties to this appeal agree is neither workable nor supported by the evidence.

We hold today that all of the adjusters in this case are exempt. The district court’s factual findings establish that, regardless of the type (personal injury v.…