GEICO to Pay $805K to Settle Overtime Wage Disputes With Claims Adjusters

Insurer GEICO has agreed to pay $805,000 total to settle class action lawsuits by claims adjusters alleging they were entitled to unpaid wages for overtime worked between May 27, 2019 and May 27, 2022.

The settlement affects 91 plaintiffs involved in five different actions filed against GEICO in Pennsylvania, New Jersey, North Carolina, Ohio and Florida over time worked beyond 40 hours per week. The settlement came about as the result of direct negotiations between the parties’ attorneys after attempts at mediation with judges in August 2022 and again in January 2023 were unsuccessful.

Out of the $805,000 total, the plaintiffs will split $442,500 for alleged unpaid wages and damages. The remainder, $362,500 will go to Zipin, Amster & Greenberg, LLC, for the payment of attorneys’ fees and costs.

The lead plaintiffs are Susan Hart, Brian Russo, Candace Erford, Timothy Schwarzmann and Ryan Zambito.

“The agreement reached is a reasonable compromise of highly disputed claims,” the parties said in a joint statement urging the courts to approve the deal. It must still be approved by the courts.

The agreement does not contain an admission of liability by GEICO.

The adjusters’ primary duty was to write estimates on damaged vehicles. They inspected vehicles in the field, at body shops and at home. They worked outside the presence of their supervisors and recorded their own time in the insurer’s timekeeping system. They reported and were paid for different amounts of overtime.

According to the joint statement, the disputed issues concerned the adjusters’ claim that they did not report all their overtime because doing so would adversely affect their productivity rating, which is one part of their performance evaluation. In its defense, GEICO asserted that the plaintiffs were instructed to accurately report their time, that no one told them to work off-the-clock, and that they reported and were paid for significant amounts of overtime.

According to GEICO, the allegations raised the question that if the adjusters reported some of their overtime, how would their supervisor know they did not report other overtime? As a matter of law, GEICO asserted, it was not required to audit electronic records of the their work activity, such as claims files or emails, to see if employees were reporting all their time.

The plaintiff adjusters, by contrast, alleged and affirmed throughout discovery that GEICO “knowingly suffered or permitted adjusters to perform off-the-clock compensable work duties,” including duties resulting in overtime work exceeding 40 hours per week. The plaintiffs, however, recognized that quantification of the amount of uncompensated work each plaintiff worked was difficult to determine or prove with accuracy and they recognized there was a substantial risk that even if they could prove GEICO’s underlying liability, the extent of alleged back wages owed to each plaintiff was at best, uncertain.

The parties agreed that absent a settlement, the cases would have resulted in substantially more discovery and litigation, and delay in resolution. At the close of discovery, GEICO intended to move for decertification of the five actions and GEICO and the plaintiffs intended to move for summary and/or partial summary judgment on the issue of liability.