Auto Club Overtime Settlement Approved

A federal judge on Monday approved a $19.5-million settlement of overtime claims brought by more than 1,300 insurance agents of the Automobile Club of Southern California.

The class-action lawsuit was originally filed in 1999 on behalf of some Southern California agents who claimed they were denied overtime pay despite working more than 60 hours a week and were required to purchase gifts to bolster sales. The suit was later expanded to include sales agents employed by AAA clubs in Texas and New Mexico, which are also owned by the Automobile Club of Southern California.

“They’re finally getting compensated for the overtime they worked years ago,” said David Borgen, an attorney representing the agents.

The Auto Club originally contended the sales agents were exempt from overtime because they were “outside salesmen.” The group has since reclassified sales agents as non-exempt workers entitled to overtime pay.

The settlement was approved by U.S. District Judge Gary L. Taylor in Santa Ana.

“While we didn’t agree with the court’s decision that our agents should be exempt, we nevertheless agreed to mediation which brought about the settlement,” said Carol Thorp, a spokeswoman for the Auto Club of Southern California.

The auto club’s insurance agents should receive checks this month of about $70 a week for each week they worked during the claim period.

In recent years a wave of class-action suits involving overtime pay has swept the state.

Farmers Insurance Exchange agreed in September to pay as much as $210 million for failing to pay overtime to 2,400 claims adjusters, in settling what lawyers said could be the nation’s largest white-collar overtime case.