Litigating California Wage & Hour and Labor Code Class Actions

decisions have concluded that under the FLSA, insurance adjusters are not entitled
to overtime. 40
Employers hoped that subsequent developments in case law would limit Bell to its
facts. Their hopes were bolstered with the Ninth Circuit’s 2007 issuance of Miller v.
Farmers Insurance Exchange. 41 In this opinion, the Ninth Circuit held that insurance
adjusters, as a rule, qualify for the administrative exemption, and it criticized the Bell
decisions’ overbroad construction of the meaning of “production work.” 42
More recently, the Fourth District Court of Appeal provided some additional
ammunition to employers trying to demonstrate that workers fit within the
administrative exemption. In Combs v. Skyriver Communications, Inc., 43 the
appellate court affirmed the trial court’s decision not to apply the
administrative/production dichotomy at all in connection with evaluating the exempt
status of an information technology (“IT”) professional.
The Combs opinion distinguished Bell on multiple grounds. First, the court noted that
Bell was legally distinguishable because it was decided before Wage Order Number
4 was revised to expressly incorporate the applicable federal regulations. 44 The court
also found Bell to be factually distinguishable because the insurance adjusters at
issue in Bell were found to have job responsibilities that were restricted to “handling
of the routine and unimportant.” 45 In contrast, the plaintiff in Combs was found to
have more specialized job duties that “cannot be readily categorized in terms of the
administrative/production worker dichotomy.” 46
Some thought that Combs signaled a backlash against the Bell decision, which many
believe went too far in emphasizing the administrative/production dichotomy over
other aspects of the test for the administrative exemption. Although Combs has
some pro-exemption language in its discussions distinguishing Bell, its application
may be somewhat limited because the plaintiff held a fairly high-level, atypical IT
40
41
42
43
44
45
46
recommendations regarding coverage of claims; determining liability and total value of a claim; negotiating settlements;
and making recommendations regarding litigation.” See also former 29 C.F.R. § 541.205(c)(5) (identifying insurance
adjusters within the universe of employees often covered by the administrative exemption).
See, e.g., Munizza v. State Farm Mut. Auto. Ins. Co., 103 F.3d 139 (9th Cir. 1996) (memorandum); Blinston v. Hartford
Accident & Indemn. Co., 20 Wage & Hour Cas. (BNA) 6 (W.D. Mo. 1970).
481 F.3d 1119 (9th Cir. 2007).
481 F.3d at 1124, 1132.
159 Cal. App. 4th 1242, 1260-62 (2008), review denied (May 14, 2008).
Id. at 1259-60.
Id. at 1259.
Id. at 1261.
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