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Geico doesn't have to pay overtime to auto adjusters, appeals court rules

Wednesday, January 06, 2010

Berkshire Hathaway's Geico insurance unit does not have to pay overtime to auto adjusters, an appeals court ruled, reversing a lower court's decision.

The U.S. Court of Appeals for the District of Columbia said Tuesday that the adjusters can be classified as "administrative employees" who are exempt from federal rules requiring time and a half for hours worked beyond 40 per week.

"The primary duty of Geico's auto-damage adjusters includes the exercise of discretion and independent judgment, and thus they come in within the administrative employee exemption" of the federal Fair Labor Standards Act, Circuit Judge Karen L. Henderson wrote for the three-judge panel.

The decision may help chief executive Warren Buffett contain costs at Chevy Chase-based Geico, one of more than 70 Berkshire subsidiaries that sell products that include Fruit of the Loom underwear and Dairy Queen ice cream. Company executives have cut jobs and closed plants at some Berkshire businesses as demand slowed in the recession. Berkshire is based in Omaha. (Buffett is a director of The Washington Post Co. and the largest non-family shareholder.)

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