HODGE v. AON INSURANCE SERVICES
KENNETH HODGE et al., Plaintiffs and Appellants,
AON INSURANCE SERVICES et al., Defendants and Respondents.
Court of Appeals of California, Second District, Division Eight.
Filed February 2, 2011.
February 24, 2011.
BIGELOW, P. J.
The Industrial Welfare Commission (IWC) has adopted a wage order, commonly known as "Wage Order No. 4," regulating the wages, hours and working conditions for professional, technical, clerical, mechanical, and similar occupations. (See Cal. Code Regs., tit. 8, § 11040.)1 In its broadest terms, Wage Order No. 4 requires an employer to pay overtime when an employee works more than eight hours in a workday or 40 hours in a work week. (§ 11040, subd. 3.) At the same time, Wage Order No. 4 provides that its overtime rules "shall not apply to persons employed in administrative, executive, or professional capacities." (§ 11040, subd. 1(A).) The appeal before us today arises from a class action in which claims adjusters currently or previously employed by a third party administrator (TPA)2 allege that their employer unlawfully designated them as exempt administrative employees as defined by Wage Order No. 4. The parties tried the case to the trial court, and the court concluded that the employer had not violated the overtime regulations because the claims adjusters were exempt administrative employees. We affirm the trial court's judgment.FACTS As a TPA, Cambridge Integrated Services Group, Inc.3 contracts with self-insured businesses, governmental agencies, and insurance companies to adjust claims involving those entities. In the context of its contracts with self-insured businesses or government agencies, Cambridge adjusts claims made directly against those entities. In the context of its contracts with insurance companies or the California Insurance Guarantee Association or "CIGA" (which takes over policies from insolvent insurers), Cambridge adjusts claims made under the insurance policies issued by those entities. Depending on the entity with which it contracts, and terms of their contract, Cambridge adjusts general liability claims, vehicle-related claims, and claims for benefits under the workers' compensation law. Between December 1997 and the present, Cambridge employed Kenneth Hodge and the other class representatives and class members as claims adjusters in a number of different offices in California.4 During the course of his employment, Hodge routinely worked more than eight hours in a single workday and/or worked more than 40 hours in a work week, but was not paid overtime compensation because Cambridge designated him as an exempt administrative employee. The details of the parties' employment relation-ship, including the adjusters' working conditions and assignments, are discussed more fully below in addressing their claims on appeal.
In December 2001, Hodge initiated a class action against Cambridge. He filed his operative first amended complaint in December 2003. As noted above, the predominant claim in Hodge's action is that Cambridge failed to pay overtime wages required under Wage Order No. 4. He originally pressed this claim in a cause of action authorized under Labor Code section 1194 (private right of enforcement of the Labor Code), and in a cause of action under the Unfair Competition Law or UCL (Bus. & Prof. Code, § 17200) based on the alleged violation of Wage Order No. 4.