Wednesday, January 6, 2010
D.C. Circuit Rules in Favor of GEICO In FLSA Suit
In Robinson-Smith v. GEICO, auto damage field adjusters sued GEICO asserting claims for unpaid overtime compensation under the Fair Labor Standards Act ("FLSA"). The trial court granted summary judgment in favor of the employees. The DC Circuit reversed, concluding that the employees fell within the scope of the FLSA's exemption for "bona fide" administrative employees under the 2003 version of the "short test" set forth at 29 CFR Section 541.2. The principal issue on appeal was whether the employees' "primary duty" included work "requiring the exercise of discretion and independent judgment." The Court of Appeals held that it did, noting that the short test does not require that discretion and independent judgment be exercised "customarily and regularly." The Court of Appeals noted that "the ...auto damage adjuster exercises discretion as often as 60 times per year in negotiations with customers over total loss claims alone." The Court reasoned that "[t]he frequency of such negotiations may be enough to satisfy even the ‘customarily and regularly' requirement of the ‘long test.'"