FARMERS INSURANCE MUST PAY $90,000,000 IN OVERTIME WAGES

Contact: Steven Zieff

Oakland, CA, 7/10/01 - A jury today awarded a class of Farmers Insurance adjusters a total of $90,009,208 as overtime pay in a class action lawsuit. 2402 adjusters working for Farmers Insurance Exchange were successful after five years of litigation in recovering an overtime fund to be divided among them. In addition, Farmers will be liable for prejudgment interest, estimated to be over $30,000,000, and the plaintiffs’ attorneys’ fees and costs. The jury verdict is the largest ever in California in a claim for overtime and may well be the largest jury verdict ever in the United States for unpaid overtime.

Bell v. Farmers Insurance Exchange, Alameda S. Ct. No. 774013, was filed as a class action on October 1, 1996. In 1999, the Superior Court in Oakland ruled that the claims adjusters were not exempt administrators and were therefore entitled to overtime pay. In March, 2001, the Court of Appeal approved the Superior Court’s ruling and in June 2001, the California Supreme Court denied a hearing in the matter.

Steven Zieff, Rudy, Exelrod & Zieff, counsel for the class stated, “This is a long-awaited vindication of these workers’ right to overtime pay. Farmers has, and continues to, deprive their workers of their statutory overtime protection -- a fundamental public policy in California. The jury has spoken. In rejecting Farmers’ lowball request that they pay $67.5 million as the overtime fund, the jury has made it clear that these workers should be paid for all of the unpaid overtime hours that they put in for Farmers’ benefit, and should not be shortchanged. This sends a message to Farmers and other employers that flagrantly violate the overtime laws that these laws can and will be enforced.”

Rose Bell, the named plaintiff in the case, was both delighted and gratified by the result. She said “I have been fighting this battle for more than five years now, and feel exhilarated and pleased that the jury has ruled so overwhelmingly in our favor.”

The jury’s verdict is intended to pay the 2402 claims adjusters for their unpaid overtime from October 1, 1993 to the June 26, 2001 trial date. The class members in this case were all personal lines claims representatives. They processed automobile and homeowners insurance claims. The 2402 class members comprise about 1/3 of Farmers’ California workforce.

Even though the courts have ruled that Farmers’ claims adjusters are entitled to overtime pay, Farmers has not changed its practices and to this day does not pay its claims adjusters their statutory overtime pay. The claims adjusters are also seeking to have the Court order Farmers to immediately begin paying overtime and to immediately keep the necessary time records to do so. It is expected that the Court will rule on these this issue in the next several weeks.

Steve Zieff commented “Farmers told the jury that it wanted the jury to create a fair fund for the adjusters because Farmers wants to take care of its employees. Farmers needs to honor its statement to the jury by stopping the interminable delay and following the law.”