Harris

This litigation tests whether certain insurance company claims adjusters are exempt employees, not entitled to overtime compensation under the Labor Code and regulations of California’s Industrial Welfare Commission (IWC or Commission). Reviewing the trial court’s denial of a summary adjudication motion, the Court of Appeal held the adjusters are not exempt employees as a matter of law. In doing so, the Court of Appeal misapplied the substantive law. We reverse.

FACTS

Plaintiffs are claims adjusters employed by Liberty Mutual Insurance Company and Golden Eagle Insurance Corporation (collectively defendants). They filed four class action lawsuits alleging defendants erroneously classified them as exempt “administrative” employees and seeking damages based on unpaid overtime work. The four actions were coordinated into one proceeding. Plaintiffs also moved for class certification. The trial court certified a class of “all non-management California employees classified as exempt by Liberty Mutual and Golden Eagle who were employed as claims handlers and/or performed claims-handling activities.”

Plaintiffs moved for summary adjudication of defendants’ affirmative defense…