Applying California’s administrative exemption test, the U.S. Court of Appeals for the Ninth Circuit recently concluded an insurance company properly classified its claims adjusters (who handled and processed disability claims) as exempt from the overtime provisions of the California Labor Code, notwithstanding the clerical duties the adjusters performed and their characterization of their work as “routine”. See Bucklin v. Zurich Am. Ins. Co., 2015 U.S. App. LEXIS 12497 (9th Cir. July 20, 2015).

The Court concluded the adjuster Plaintiffs “primarily performed work directly related to Zurich’s management policies or general business operations,” insofar as the Plaintiffs “developed a plan of action for resolving each claim and represented Zurich while investigating claims, setting reserves, directing litigation and negotiating settlements.” Further, the Court found the Plaintiff’s “exercised discretion and independent judgment” by setting reserve amounts, which involved considering the nature and extent of the claimed injury and the likelihood of the claimant’s permanent disability. Additionally, the Plaintiffs operated under limited direct supervision and earned more than twice the state minimum wage. Rejecting Plaintiffs assertion, the Court concluded that Plaintiffs performance of “some” routine clerical duties, and the requirement that they adhere to Zurich’s best practices manual, did not undermine the Plaintiffs’ status as exempt administrative employees.

Bucklin reinforces the need for industry employers to ensure job duties support any exempt classification.