Appellate Court's Opinion
On September 3, 2014 the U.S. Court of Appeals for the Ninth Circuit affirmed the district court's grant of class certification (overtime class action) to Jack Jiminez and about 800 other Allstate employees in California who alleged that Allstate has a practice or unofficial policy of requiring its claim adjusters to work unpaid off-the-clock overtime in violation of California law.
The Appellate Court holds that the district court did not abuse its discretion in applying Fed. R. Civ. P.23 (a)(2)'s commonality requirement and that the class certification order did not violate Allstate's due process rights. Specifically, the panel held that the class certification order preserved Allstate's opportunity to raise any individualized defenses at the damages phase, and that the district court's approval of statistical modeling did not violate Allstate's due process rights.
The Court's full opinion can viewed by clicking here.
Allstate has 13 local offices in California, which are individually managed but under centralized leadership. At those 13 offices, Allstate employs five categories of claims adjusters, some whom spend most of their workday in a particular office (“inside” adjusters), while others, although they are officially assigned to a particular office, spend most of their time in the field (“outside” adjusters). The amount and type of work, as well as the level and quality of claims adjusters' interaction with managers, varies between offices, between categories of adjusters, and between inside and outside adjusters.
In 2005, Allstate shifted all of its California-based claims adjusters to hourly status from exempt, or salaried, positions. Before that reclassification, claims adjusters often worked more than 8 hours per day or 40 hours per week. Since the reclassification, claims adjusters' workload has been substantially the same as it was before the reclassification, their compensation is still referred to as an annual salary, and hourly payment rates are not shared with current or prospective employees.
Claims adjusters do not keep time records. Rather, the manager of each local office has the power to file a timekeeping “exception” or “deviation” from the default expectation of 8 hours per day and 40 hours per week. This adjustment takes place when a claims adjuster's request for overtime or early leave is approved. Managers do not adjust time cards based on either their own observations of work habits or on the technological records contained in computer and telephone systems. Each local office has a non-negotiable compensation budget, which creates a functional limit on the amount of overtime a manager may approve.
Jimenez filed a class action suit alleging that Allstate had not paid overtime to current and former California-based claims adjusters in violation of California Labor Code §§510 and 1198 and had not paid adjusters for missed meal breaks in violation of California Labor Code §§226.7 and 512 (a). The complaint also made derivative claims that Allstate had not timely paid wages upon termination in violation of California Labor Code §§201 and 202, had issued non-compliant wage statements in violation of California Labor Code §226(a), and had engaged in unfair competition in violation of California Business and Professions Code § 17200.
Jimenez is notable because of its adherence to the relatively new class certification procedural criteria set forth in Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011). To discuss the Wal-Mart case of the Allstate case in more detail, don't hesitate to contact the experienced California employment lawyers at Kingsley & Kingsley. Feel free to call us toll-free at (888) 500-8469 or contact California lawyers Kingsley & Kingsley via email here.