Claims Adjusters Qualified For FLSA’s Administrative Exemption
Plaintiffs Paula Roe-Midgett and Paul Decker sued their employer CC Services, Inc. (“CCS”) for overtime wages under the Fair Labor Standards Act (“FLSA”). CCS contracts with insurance companies to provide claims processing services for auto, home, commercial, and farm policies. Roe-Midgett and Decker were employed as claims adjusters at different levels of CCS's claims-processing hierarchy. Suing individually and on behalf of four classes of claims adjusters, the plaintiffs contended that CCS improperly classified them as administrative employees exempt from FLSA overtime requirements.
Applying the Department of Labor's so-called “short test” for determining whether employees fall within the FLSA's administrative exemption, the district court concluded that the primary duties of all four claims-processing positions involved matters (1) “directly related to management policies or general business operations” and (2) “requiring the exercise of discretion and independent judgment.” Accordingly, the court held the employees were exempt from the overtime pay requirements of the FLSA and granted summary judgment for CCS.
On appeal the plaintiffs developed no substantive challenge to the district court's ruling as it related to three of the four classes of employees: CCS's Field Claims Representative II, Field Claims Representative III, and Property Specialist positions. As to these employees, they argued only that material issues of fact preclude summary judgment for CCS. But they failed to identify any real factual dispute specific to these employees.
Regarding the final group of employees-those occupying the position of Material Damage Appraiser II-the plaintiffs contended that the duties of this position did not directly relate to CCS's management policies or general business operations and do not require the exercise of discretion and independent judgment. The 7th Circuit disagreed with those contentions, and affirmed the judgment for CCS:
Material Damage Appraisers provide claims adjustment services for CCS's insurance company clients up to a $12,000 limit of claims settlement authority and represent the “face” of CCS to the countless claimants with whom they interact. They spend much of their time in the field without direct supervision. They conduct on-site investigations of first- and third-party automobile insurance claims; interview claimants, witnesses, and law enforcement personnel; estimate loss; determine whether parts should be repaired or replaced; negotiate with mechanics and body shops and draft final repair estimates; and settle claims up to the limit of their $12,000 settlement authority. These duties directly relate to CCS's business operations and reflect a sufficient degree of discretion and independent judgment to qualify for the FLSA's administrative exemption. Summary judgment was properly entered for CCS on all four classes of employees.
Roe-Midgett v. CC Services
The 7th Circuit Court of Appeals’ jurisdiction includes Illinois, Indiana and Wisconsin.