Sonnenschein recently filed an amicus brief in the California Supreme Court addressing the question of whether insurance company claims adjusters fall within the administrative exemption under California law, which otherwise generally requires overtime pay for employees.
In Harris v. Liberty Mutual Insurance Company and Golden Eagle Insurance Corporation, the appellate court held that the insurance adjusters performed "production" work that does not meet one of the state's standards for administrative exemptions. That standard specifies that, to be exempt, a worker must perform "office or non-manual work directly related to the management policies or general business operations of his or her employer or the employer's customers." The court held that the "directly related to" test is only satisfied when the employee performs work "at the level of policy or general business operations."
Based on the importance of this issue to the insurance industry, the Association of California Insurance Companies, the Personal Insurance Federation of California, and the Pacific Association of Domestic Insurance Companies retained Sonnenschein to file an amicus brief supporting the industry position that the work of claims adjusters is exempt work. In its brief, drafted by Paul Glad, Gayle Athanacio and Virginia Young of Sonnenschein's San Francisco office, the firm argued that the appellate court created a new and inappropriate standard for determining the exemption status of claims adjusters. The firm's brief maintains that the new standard is contrary to both the relevant federal regulations expressly incorporated into the California overtime law and Department of Labor opinion letters, which recognize claims adjusters as exempt employees.