Hodge v. Aon Ins. Servs., 192 Cal. App. 4th 1361 (2011)

Plaintiffs in this case are claims adjusters employed by a third party administrator (Cambridge Integrated Services Group, Inc.). Depending on the entity with which it contracts and the terms of the contract, Cambridge adjusts general liability, vehicle-related and workers’ compensation claims. In their claim alleging violation of the Unfair Competition Law, plaintiffs alleged they had been misclassified as exempt administrative employees and that they were owed unpaid overtime. After a bench trial (plaintiffs chose to proceed without a jury following an initial jury trial in which they did not “fare well”), the trial court entered a judgment in favor of Cambridge. The Court of Appeal affirmed the judgment after concluding that the work performed by the adjusters is “directly related to management policies or general business operations” of Cambridge’s self-insured, noninsurance-related clients. The Court also concluded the adjusters exercised sufficient discretion and independent judgment to qualify for the exemption and that they are involved in work of substantial importance to the company’s clients. See also In re United Parcel Serv. Wage & Hour Cases, 2011 WL 653863 (Cal. Ct. App. 2011) (although it was the prevailing party in various wage/hour claims, employer was entitled only to recovery of litigation costs and not attorney’s fees).