On December 6, 2021, GEICO filed an answer denying any liability in a proposed class-action suit filed by a former claim adjuster alleging violations of federal and state overtime laws.
The plaintiff, Mark Pugliesi of Salisbury, claims in his suit that GEICO knowingly pressured claims adjusters to work more than 38 hours a week but not to put in timecards for their work beyond seven and one-half hours per day. As a result, according to Mr. Pugliese’s complaint, adjusters had to work between forty and fifty hours per week, without any overtime pay for the work performed after forty hours.
The overtime suit, pending in Federal Court in Boston, alleges that GEICO violated the Federal Fair Labor Standards Act, 29 U.S.C. § 201, et. seq. (“FLSA”) and the Massachusetts Wage Act, M.G.L. c. 149, §§148, 150, and 151 (“MWA”).
The suit seeks to recover for Mr. Pugliese and other similarly situated adjusters who worked for GEICO at any time during the period between October 2018 in March 2021, their unpaid wages at the time-and-one-half rate for their work performed after a forty (40) hour workweek, statutory liquidated damages, and attorney fees and costs.
Mr. Pugliese’s employment with GEICO and the class he seeks to represent
Mr. Pugliese bases his complaint upon his employment with GEICO for the two years between January 2019 in March 2021.
During his employment with GEICO, he had the title “Auto Damage Adjuster.” His work was primarily involved adjusting auto and homeowner damage claims in Essex and Suffolk County. His duties included:
- Contacting customers and setting up inspections to evaluate vehicle / residential / catastrophic damage.
- Communicating with customers regarding the status of their claims and explaining the claims process.
- Inspecting properties/vehicles to evaluate the extent of loss and/or determining if a claim was repairable or a total loss.
- Negotiating with customers on the amount of loss/settlement.
- Setting up / approving rentals.
- Setting up and monitoring repairs, and
- Processing the related claim and repair paperwork.
Mr. Pugliese’s class action complaint seeks for him to represent and recover unpaid overtime wages and statutory damages for all persons employed by GEICO in Massachusetts for the class period who performed substantially similar job duties to Mr. Pugliese under GEICO’s compensation system as either an Auto Damage Adjuster I, II, and III; (ii) a Residential Damage Adjuster I, II, and III; or (iii) a Catastrophic Damage Adjuster I, II, and III.
GEICO’s payment to adjusters based on 38.75 hours per week
Mr. Pugliesi’s complaint alleges that GEICO paid him and other Massachusetts Adjusters “a weekly salary and later at an hourly rate designed and intended to compensate …for only 7.75 hours per day or 38.75 hours per week (8:00 AM – 4:30 PM, with no wages paid for a 45-minute meal period = 7.75 hours per day) * 5 days per week = 38.75 hours per week).”
GEICO’s alleged practice to benefit from unpaid overtime
Mr. Pugliese’s suit alleges that GEICO’s practices forced him and other Massachusetts Adjusters to enter 7.75 hours per day or 38.75 hours per week on their company timesheets even though they had to regularly work over forty and up to fifty hours per week.
During the period of at least 2019 through at least March 2021, Mr. Pugliese alleged that GEICO had a company-wide policy and practice, enforced through the adjusters’ supervisors and GEICO employee evaluation matrices, conveying that it was better for Mr. Pugliese and the other Massachusetts Adjusters’ careers to stay quiet rather than speak up or complain about their additional unpaid compensable work hours. According to Mr. Pugliese, any complaints about GEICO paying based on the adjusters’ reported hours rather than the actual hours would result in the adjuster getting a “poor workplace reputation, negative performance reviews, and risk additional negative workplace consequences.”
A second adjuster submits an affidavit about GEICO’s alleged overtime pay practices
Michael Loughlin of Farmington, New Hampshire, who also worked as a claim adjuster for GEICO for three years in the same geographical area as Mr. Pugliese, filed an affidavit in support of the court issuing an order for GEICO to turn over the names and addresses of the possible class members. Mr. Loughlin’s affidavit tracked the averments of Mr. Pugliese’s affidavit as to GEICO’s alleged denial of overtime pay practices.
Court schedules a March 2022 hearing on class certification to notify GEICO adjusters
Mr. Pugliese’s attorneys filed a motion to certify a class and give notice. In particular, the motion seeks “Court-supervised notice and conditional certification of the following group of potential plaintiffs: all individuals who work or worked for GEICO as an Automobile and/or Residential and/or Catastrophic Damage Adjusters I and/or II and/or III within Massachusetts at any time during the period October 2018 through March 2021.”
The court has scheduled the hearing on the motion for March 10, 2022, and allowed GEICO until January 21, 2022, to file its opposition to Mr. Pugliese’s motion requesting the court to order notice of all the potential GEICO class members.
In addition to the motion, Mr. Pugliese seeks an order from the court requiring GEICO to provide the names, home addresses, email addresses, and telephone numbers, including home and cellular, for any of the potential Massachusetts adjusters in the proposed class.
If the court allows Mr. Pugliese’s motion, the potential class members will receive email and text notices allowing them to join the suit by executing an opt-in form.
The notice to the potential class members, if allowed by the court, will only start the legal process.
In this case, Mr. Pugliese as a class representative will have to prove GEICO’s statutory liability to the class members under FLSA and the Massachusetts Wage Act. This may not be an easy task. GEICO has previously prevailed in, at least one suit, where a court has held that GEICO’s adjusters were exempt employees under FLSA, which meant GEICO did not have to pay overtime.
Agency Checklists will keep you posted
Agency Checklists will monitor this case and update its readers.
Owen Gallagher
Insurance Coverage Legal Expert/Co-Founder & Publisher of Agency Checklists
Over the course of my legal career, I have argued a number of cases in the Massachusetts Supreme Judicial Court as well as helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth.
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