A Pennsylvania Federal District Court recently held that an insurance claims examiner was not entitled to overtime under the Fair Labor Standards Act, because his job involved enough discretion to bring him within the administrative exemption for overtime under 29 U.S.C. 207.  , 2014 U.S. Dist. Lexis 25785 (D. Pa. 2014).

Michael Estrada was a claims examiner for the defendant.  He filed an action for overtime pay under the FLSA.  The defendant argued that the plaintiff was exempt from overtime under the statute and the court granted summary judgment in favor of the employer.

The court pointed out that the FLSA regulations governing the overtime exemption provide that insurance claim adjusters generally meet the duties requirement for the administrative exemption. 29 C.F.R. 541.203 (a).  Basically, the exemption applies to any employee: (1) who is compensated on a salary basis of not less than $455 per week; (2) whose primary duty is the performance of office or non-manual work directly related to the management of the employer: and (3) whose primary duty involves the exercise of discretion in matters of significance. 29 C.F.R. 541.200(a).

The court held that Estrada’s job fell within the exemption noting the amount of discretion exercised in his duties. The court distinguished his job from that of junior-level claims adjusters which the Department of Labor had found to be non-exempt because these adjusters had limited settlement authority and were required to seek supervisor approval for any decisions.