GEICO Settles Wage Suit Over Meal Break Claims for $155K

A group of workers reached a $155,000 deal with GEICO to individually settle their wage suit filed in California federal court, where the employees accused the company of requiring them to work through meal breaks, leaving them underpaid.

U.S. District Judge R. Gary Klausner approved the settlement agreement and dismissed the claims Thursday that the Government Employees Insurance Co. violated the Fair Labor Standards Act by withholding both straight and overtime premium pay due to the meal and rest break violations.

"The settlement is... fair and reasonable under the circumstances," Judge Klausner said.

The auto claim adjusters first sued GEICO in December 2020, claiming that even when workers tried to take 30-minute meal breaks, which employees are entitled to by law, management would interrupt them and pressure them to work. The issues also led to unfair labor practice violations and inaccurate wage statements, the workers said.

Initially, the employees sought to represent workers, in California and New York, as well as others across the country, through a proposed class and collective action. GEICO attempted to get the case tossed, arguing the New York claims couldn't be litigated in California federal court.

In March, the workers pushed back that the FLSA is meant to uphold collective actions and does not aim to exclude out-of-state claims.

Ultimately, the workers did not seek class or collective certification and settled the case individually, according to a joint motion to dismiss the case filed with the court in January. The court dismissed the workers' class action claims in August and the adjusters agreed to file an amended complaint a day later striking the collective action claims, the motion said.

After a series of discussions an agreement was brokered Dec. 21, the joint motion said.

The $155,000 figure includes attorney fees and will be divided among the 12 adjusters, based upon the number of weeks they worked for GEICO during the statutory period, according to the joint motion.

"The settlement represents a reasonable compromise of highly contested and disputed claims," the parties said in the motion.

Counsel for both parties did not immediately respond to request for comment, nor did a GEICO spokesperson.

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