Says Suit Could Cost GEICO More Than $5 million
By Daniel Hays
NU Online News Service, July 24, 4:07 p.m. EDT?A federal class action lawsuit against GEICO Insurance concerning employee overtime, if successful, could cost the company "$3 million to $5 million at a minimum," an attorney involved in the action said.
Richard J. Burch, with the law firm of Brucker Burch in Houston, said plaintiffs believe that during the three years at issue GEICO was underpaying its 21,000 employees $500,000 a week.
GEICO said it was its policy "not to discuss pending litigation. We are currently investigating these allegations, and if we identify any problems, we will, of course correct them. GEICO was built on the ethic of treating people fairly, our employees as well as our customers."
Since the suit was filed in U.S. District Court in Dallas, Mr. Burch said the company had made some changes. He said the alleged underpayment was going on for a substantial period of time, but under federal law the recovery time period was limited to the past three years. Liquidated damages that are recoverable, he said, would mean a doubling of any lost wages, were the suit successful.
Mr. Burch said the company call center employees, when they arrive at work have to spend time picking up forms, finding which desk they are assigned to and checking e-mails for company bulletins that might, for example, identify a tornado-impacted territory where policies should not be written that day. GEICO, he said, has not reimbursed employees for this time and only paid them for time spent handling customer calls.
He estimated that, on average, the call center employees were being shorted by eight percent of each weekly paycheck.
Mr. Burch said since Judge Barbara Lynn certified the matter as a class action 1,000 employees have opted to become part of the suit and the rest have until Aug. 21 to opt in or out.
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