Free Amended Complaint - District Court of Arizona - Arizona

IN THE UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA IN RE ALLSTATE INSURANCE COMPANY FAIR LABOR STANDARDS LITIGATION ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

CASE NO. MDL 1541 JUDGE: ROSENBLATT

LEONARD GAGLIONE 2666 Shaker Road Cleveland Heights, Ohio 44118 and MICHAEL AIKEN 7192 State Route 534 Windsor, Ohio 44099 and MAXINE SLAPPY 1871 Dior Drive Marietta, Georgia 30062 Individually, and on behalf of all others similarly situated, Plaintiffs, -vsALLSTATE INSURANCE COMPANY 3075 Sanders Rd. Ste H1A Northbrook, Illinois 60062-7127 and ALLSTATE NEW JERSEY INSURANCE COMPANY 721 US Highway 202 Bridgewater, NJ 08807

N.D. Oh. No. 5:02CV1988

AMENDED COMPLAINT OF PLAINTIFFS LEONARD GAGLIONE, MICHAEL AIKEN AND MAXINE SLAPPY

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and KARL MECKERT c/o ALLSTATE INSURANCE CO. 280 Executive Parkway West Hudson, Ohio 44236 and KIM LOWE c/o ALLSTATE INSURANCE CO. 2265 Darrow Road Hudson, Ohio 44236 Defendants.

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Now come the Plaintiffs, Leonard Gaglione, Michael Aiken, and Maxine Slappy by and through their undersigned counsel and for their Amended Complaint state as follows: 1. This is a class and collective action brought on behalf of the Plaintiffs, and the Plaintiff Class which is made up of all persons who are or have been employed by Defendants Allstate Insurance Company (hereinafter "Allstate") and Allstate New Jersey Insurance Company (hereinafter referred to as "Allstate NJ") from October 7, 1999, up to the date of entry or judgment in this case, who are or were employed by the Defendants, or their affiliates or subsidiaries, as salaried claims representatives anywhere in the United States. The Plaintiffs are similarly situated with the Plaintiff Class in that they are all, or were at all pertinent times herein, salaried Allstate Claims Representatives, and Defendants failed to pay to them overtime compensation as required by law.

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2. Plaintiffs seek relief for themselves and the Plaintiff Class pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §201 et seq. Exhibits A, B, and C attached to this Complaint, are Consent to Sue forms as required by FLSA. JURISDICTION AND VENUE 3. The Plaintiffs incorporate all allegations made in this Complaint as if fully rewritten herein, and further state that this Court has subject matter jurisdiction of this action pursuant to 28 U.S.C. §1331 and 29 U.S.C. §216(b). 4. Plaintiff Leonard Gaglione is a natural citizen who resides in the City of Cleveland Heights, County of Cuyahoga and State of Ohio. 5. Plaintiff Michael Aiken is a natural citizen who resides in the City of Windsor, County Ashtabula and State of Ohio. 6. Plaintiff Maxine Slappy is a natural citizen who resides in the City of Marietta, and State of Georgia. PARTIES 7. Plaintiffs reincorporate all allegations in this Complaint as if fully rewritten herein, and further state that as of the date of the original complaint, Plaintiff Leonard Gaglione was continuously employed as a salaried claims representative by the Defendants beginning on September 15, 1985 at Defendants' Property Claims office located in the City of Hudson, County of Summit, and State of Ohio. Plaintiffs and all members of the Plaintiff Class were, at all times relevant herein, assigned case loads which, because of the nature and quantity of the work, required that Plaintiff and all members of the Plaintiff Class work in excess of

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forty hours per week without receiving overtime compensation, in violation of the provisions of the FLSA. 8. That as of the date of the original complaint, Plaintiff Michael Aiken was continuously employed as a salaried claims representative by the Defendants beginning on September 30, 1996 at Defendants' claims office located in the City of Hudson, County of Summit and State of Ohio. Plaintiffs and all members of the Plaintiff Class were, at all times relevant herein, assigned case loads which, because of the nature and quantity of the work, required that plaintiff and all members of the Plaintiff Class work in excess of forty hours per week without receiving overtime compensation, in violation of the provisions of the FLSA. 9. That as of the date of the original complaint, Plaintiff Maxine Slappy was continuously employed as a salaried claims representative by the Defendants beginning on June 10, 1996, at Defendants' Casualty Claim office located in the City of Hudson, County of Summit and State of Ohio. Plaintiffs and all members of the Plaintiff Class were, at all times relevant herein, assigned case loads which, because of the nature and quantity of the work, required that plaintiff and all members of the Plaintiff Class work in excess of forty hours per week without receiving overtime compensation, in violation of the provisions of the FLSA. 10. The Plaintiff Class, upon information and belief, has in excess of 12,000 members across the United States. The Plaintiffs are bringing this action individually, and on behalf of all others similarly situated. 11. The Allstate Defendants are corporations engaged in interstate commerce in the business of insurance throughout the United States. Allstate is headquartered in

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Northbrook Illinois, but maintains claims and sales offices throughout the United States, issuing insurance policies, and processing claims. 12. Allstate NJ is a corporation engaged in interstate commerce in the business of insurance. Allstate NJ is headquartered in Bridgewater, New Jersey. 13. Defendants Meckert and Lowe upon information and belief are Market Claim Managers, or other Executives higher than Market Claim Managers in Allstate's corporate structure, and in that capacity Defendants have promoted, engaged in, and ratified the unlawful practice of refusing to provide overtime pay to Plaintiffs and all members of the Plaintiff Class. 14. At all times relevant herein the Defendants Meckert and Lowe were acting on behalf of and within the course and scope of their agency/employment with the Allstate Defendants. FACTUAL ALLEGATIONS 15. Plaintiffs reincorporate all allegations in this Complaint as if fully rewritten herein, and further state that at all times relevant herein, the Plaintiffs and all members of the Plaintiff Class have routinely worked and continue to routinely work in excess of forty hours per week. Allstate and Allstate NJ have maintained an employment policy during all relevant times herein that requires Plaintiff and the members of the Plaintiff Class to work for "as long as it takes to do the job" every week. The number of claim files that have been, and continue to be, assigned to each claim representative is so heavy as to necessitate that the Plaintiffs, and the members of the Plaintiff Class, work well in excess of forty

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hours per week and work during their scheduled vacations and weekends in order to maintain their caseload as well as their jobs. 16. At all times relevant herein, Allstate and Allstate NJ wrongfully and willfully classified the Plaintiffs and the members of the Plaintiff Class as "exempt" employees as defined in 29 U.S.C. §213 and paid said employees a set salary, with no overtime, irrespective of the hours actually worked. 17. As Allstate claims representatives, Plaintiffs and all members of the Plaintiff Class, have not been engaged in bona fide executive, administrative or professional positions within the meaning of 29 U.S.C. §213(a) and are not exempt employees within the meaning of 29 U.S.C. §213(a). Plaintiffs and all members of the Plaintiff Class process claims under strict procedural guidelines developed and implemented by Allstate and Allstate NJ and are not permitted to exercise any meaningful independent judgment or discretion. The guidelines govern and tightly control all the routine tasks of adjusting claims such as when to take a recorded statement, when to photograph a damaged vehicle, what to say to Allstate claimants, and how to greet a caller. To reinforce adherence to its routinized claims adjusting process, Plaintiffs and the members of the Plaintiff Class are penalized in their Progress Development Summaries if they do not strictly follow the "process matrices," or the procedures established by Allstate and Allstate NJ. 18. Allstate and Allstate NJ have classified its claim representatives as "exempt" despite the fact that it knows that this classification is a willful and flagrant violation of the FLSA. The Plaintiffs and the Plaintiff Class Members are not,

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and have never been, adjusting claims in a manner that would justify their classification as "exempt employees" under 29 U.S.C. §213(a) of the FLSA. 19. The Defendants in concert with each other have saved Allstate and Allstate NJ in excess of one billion dollars ($1,000,000,000.00) in unpaid overtime compensation, as a direct and proximate result of their knowing and willful misclassification of Plaintiffs, and the Plaintiff Class Members as "exempt employees" under 29 U.S.C. §213(a). 20. Allstate and Allstate NJ knowingly and willfully failed and continue to fail to keep records of the hours worked by the Plaintiffs and the Members of the Plaintiff Class. However, other evidence generally reflecting the number of hours worked each week by the Plaintiffs and the Plaintiff Class are in the possession of Allstate and Allstate NJ. REPRESENTATIVE ACTION ALLEGATIONS 21. Plaintiffs reincorporate all allegations in this Complaint as if fully rewritten herein, and further state that they are brining this action as a class and collective action on behalf of: All persons who, since October 7, 1999 to the date of entry of judgment in this case have been employed, or are currently employed as a claim representative in personal lines, casualty, property, and auto by Allstate and Allstate NJ, anywhere in the United States, and who were, or are, classified as exempt employees and not paid for overtime hours worked.

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22. Plaintiffs are similarly situated to the members of the Plaintiff Class within the meaning of 29 U.S.C. §216(b). FIRST CAUSE OF ACTION (FAILURE TO PAY OVERTIME WAGES AS REQUIRED BY THE FLSA) 23. Plaintiffs reallege and incorporate all allegations made in this Complaint as if fully rewritten herein, and further state that 29 U.S.C. §207(a)(1) provides in pertinent part that "Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce...for a workweek longer than forty hours, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." 24. 29 U.S.C. §213(a), and (a)(1) provide in pertinent part: "...the provisions of section...7 [29 USCS §207] shall not apply with respect to (1) any employee employed in a bona fide executive, administrative, or professional capacity..." This exemption does not apply to the Plaintiffs and the members of the Plaintiff Class (i.e. Allstate's and Allstate NJ's claim representatives during all pertinent times herein), because the criteria for executive, administrative, or professional exemptions are not satisfied herein. No other exemption under 29 U.S.C. §213 applies to the Plaintiffs and the members of the Plaintiff Class. 25. The Plaintiffs and the members of the Plaintiff Class spent in excess of 50% of their time performing non-exempt duties, they follow strict guidelines established by Allstate and Allstate NJ for the handling of claims, they are "production

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workers," they do not exercise any discretion or independent judgment, they do not manage any other Allstate and Allstate NJ employees, and do not make any decisions that affect Allstate and Allstate NJ as a whole. 26. 29 U.S.C. §216(b) provides in pertinent part that: "An action to recover the liability prescribed in either of the preceding sentences [29 USCS §§206, 207] may be maintained against any employer...in any Federal or State Court of competent jurisdiction by any one or more employees for and on behalf of himself or themselves and other employees similarly situated." 27. Plaintiffs allege that the Defendants have misclassified them, and the members of the Plaintiff Class as "exempt" employees under the FLSA, and have unlawfully refused to pay them overtime compensation, as mandated by the FLSA. 28. As a direct and proximate result of Defendants' violation of the FLSA as alleged herein, Plaintiffs seek unpaid overtime wages at time and one half of their regular rate, liquidated damages in an equal amount, plus attorney fees, interest, and costs, for themselves and all members of the Plaintiff Class for the two (2) year period preceding the filing of this action. SECOND CAUSE OF ACTION (REQUEST FOR INJUNCTIVE RELIEF) 29. The Plaintiffs hereby allege and incorporate by reference all allegations in this Complaint as if fully rewritten herein, and further state that 29 U.S.C. §217 provides in pertinent part: "That the district courts...shall have jurisdiction, for cause shown, to restrain violations of sections 215 of this title, including in the case of section 215(a)(2) of this title the restraint of any withholding of payment

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of minimum wages or overtime compensation found by the court due to employees under this chapter..." 30. The Plaintiffs and all members of the Plaintiff Class have worked and continue to work in excess of forty hours per week. The Defendants have willfully and unlawfully refused, and continue to refuse, to pay the Plaintiffs and members of the Plaintiff Class any compensation for overtime worked. 31. Therefore, the Plaintiffs and the members of the Plaintiff Class respectfully request that this Court issue an injunction permanently requiring Allstate and Allstate NJ to pay overtime compensation to its claim representatives. 32. Plaintiffs are entitled to attorney fees and costs for promoting the interests of the members of the Plaintiff Class, and in causing the Defendants to cease their violations and unlawful acts under the FLSA. THIRD CAUSE OF ACTION (WILLFUL VIOLATIONS) 33. Plaintiffs hereby reallege and incorporate all allegations in this Complaint as if fully rewritten herein, and further state that the Defendants have willfully and wrongfully violated the FLSA by misclassifying the Plaintiffs and the members of the Plaintiff Class as "exempt" employees, and refusing to pay overtime compensation as required by law. 34. Allstate and Allstate NJ knew or should have known that the Plaintiffs, and the members of the Plaintiff Class (i.e. Allstate's and Allstate NJ's claim representatives during all pertinent times herein), did not fulfill the criteria of

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"exempt" employees, yet it purposely refused to pay overtime compensation to aforementioned employees as required by law. 35. As a direct and proximate result of Defendants' willful and knowing violation of the FLSA as alleged herein, Plaintiffs seek unpaid overtime wages at time and one half of their regular rate, liquidated damages in an equal amount, plus attorney fees, interest, and costs, for themselves and the members of the Plaintiff Class for the three (3) year period preceding the filing of this action.

WHEREFORE, Plaintiffs demand judgment on behalf of themselves, and on behalf of the Plaintiff Class as follows: a) For overtime compensation from October 7, 1999 to the date of judgment; b) For liquidated damages; c) For injunctive relief; d) For Attorneys' fees; e) For costs of maintaining this action; f) For prejudgment and post-judgment interest; g) For any other relief in law or equity that this Court deems just and proper.

JURY DEMAND The Plaintiffs, and the members of the Plaintiff Class, hereby demand a trial by jury of all causes of action and issues herein, so triable.

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Respectfully submitted, /s/ George Sintsirmas George Sintsirmas, Esq. (0032771) 6212 Coldstream Road Highland Heights, Ohio 44143 Telephone: (440) 446-1529 Facsimile: (440) 446-1530 Email: [email protected] /s/ Steven M. Weiss Steven M. Weiss, Esq. Law Offices of Steven M. Weiss 1250 Illuminating Building 55 Public Square Cleveland, Ohio 44113 Telephone: (216) 348-1800 Facsimile: (216) 348-1130 Email: [email protected] /s/ Mark Wintering Mark Wintering, Esq. (0008015) Robert P. Sweeney (0026605) Robert E. Sweeney Co., LPA 55 Public Square, Suite 1500 Cleveland, Ohio 44113 Telephone: (216) 696-0606 Facsimile: (216) 696-0679 Email: [email protected] CERTIFICATE OF SERVICE A copy of the foregoing was sent electronically this 10th day of May, 2006 to: Joel E. Krischer, Esq. Attorney for Defendants [email protected] Latham & Watkins, LLP 633 West Fifth Street, Suite 4000 Los Angeles, CA 90071-2007

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Andrew M. Paley, Esq. [email protected] One Century Plaza, Suite 3300 2029 Century Park East Los Angeles, CA 90067 Donald A. Wall, Esq. [email protected] Squire, Sanders & Dempsey, LLP 4900 Key Tower 127 Public Square Cleveland, Ohio 44114-1304 Kelly McInerney, Esq. [email protected] 18124 Wedge Parkway, Suite 503 Reno, Nevada 89511 Andrea Watters, Esq. [email protected] Watters & Watters, PC 2807 East Broadway Blvd. Tucson, Arizona 85716 James Jones, Esq. [email protected] Gillespie, Rozen, Watsky, Motley & Jones 3402 Oak Grove Avenue, #200 Dallas, TX 75204

/s/ Steven M. Weiss STEVEN M. WEISS (0028984)

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