LOS ANGELES, Sept. 3, 2014 (GLOBE NEWSWIRE) -- In a stunning defeat for Allstate Insurance Company, the Ninth Circuit Court of Appeals ruled in a 16 page ruling that a class action lawsuit involving 800 Allstate employees in California who alleged that Allstate had a practice or unofficial policy of requiring its claim adjusters to work unpaid off-the-clock overtime in violation of California law may move forward.
"The potential recovery in this case is expected to be in the hundreds of millions for wage theft by Allstate," said plaintiffs' attorney R. Rex Parris. "Casualty adjuster Jack Jimenez brought the suit in 2010 on behalf of any claims adjuster working for the insurer in the state of California since Sept. 29, 2006. The complaint alleges that Allstate's managers are required to stay within an annual budget that includes overtime compensation, and that the performance evaluations and bonuses paid to managers are dependent on how closely they conform to the budget. This would mean that a manager would have a disincentive to approve and report overtime, the class claims," added plaintiffs' attorney Alexander R. Wheeler with the R. Rex Parris law firm.
The class action alleges that Allstate sees repeated requests for overtime as a performance issue to be addressed with individual workers — including "suggestions" on how a claims adjuster can be better trained on efficiency and alternative methods of getting the work done that do not require overtime. Managers would often see workers performing off-the-clock work outside of their scheduled shifts but not inquire if overtime was requested, the workers say.
"The plaintiffs contend Allstate's allegedly illegal conduct has been widespread and consistent. The class action suit alleges that Allstate had not paid overtime to current and former California-based claims adjusters in violation of California Labor Code and had not paid adjusters for missed meal breaks and that Allstate had not timely paid wages upon termination in violation of the California Labor Code. In addition the lawsuit alleges that Allstate engaged in unfair competition in violation of California Business and Professions Code," said Wheeler.
Calling Allstate's policy on off-the-clock work a "pervasive problem," plaintiffs' attorney Alexander R. Wheeler said that since only managers could record overtime hours, the insurer's policy prevented overtime from being paid. "The Ninth Circuit Court of Appeals saw behind Allstate's written policies," Wheeler said. "The facts uncovered an unofficial policy to violate the written policy." A decade ago, the R. Rex Parris Law Firm represented a class of Allstate claims adjusters, which led to the insurer's 2005 reclassification of the adjusters from salaried employees exempt from the 40-hour workweek and resulting overtime rules, to hourly, nonexempt workers.
The Allstate Corporation is the largest publicly held personal lines property and casualty insurer in America. The company is listed on the New York Stock Exchange under the trading symbol ALL. As of year-end 2013, Allstate had $123.5 billion in total assets. In 2014 Allstate was number 92 on the Fortune 500 list of largest companies in America.
Jack Jimenez v. Allstate Insurance Company - CV 10-8486 AHM (FFMx)
About The R. Rex Parris Law Firm
For over 25 years, R. Rex Parris has devoted his practice to protecting the rights of injured people and aggrieved workers. Rex and his dedicated team provide thorough, high-quality representation with integrity and compassion. From motor vehicle crashes to class actions and defective products, these lawyers fight aggressively against corporate defense attorneys and insurance companies to ensure their clients get the compensation they deserve. For more information please visit rrexparris.com
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