Auto damage adjusters for an insurance company meet the criteria of exempt administrative employees under the Fair Labor Standards Act and are thus exempt from overtime payments, rules the D.C. Circuit.

The Court overturns a lower court decision that the primary duty of the company’s auto damage adjuster does not include “discretion and independent judgment.” The Court observes: “An employee satisfies this requirement only if he ‘has the authority or power to make an independent choice, free from immediate direction or supervision and with respect to matters of significance,’” further finding that “the assessment, negotiation and settlement of automobile damage claims, includes the exercise of discretion and independent judgment.”

The company auto damage adjuster “exercises discretion as often as 60 times per year in negotiations with customers over total loss claims alone, the Court says. “The frequency of such negotiations may be enough to satisfy even the ‘customarily and regularly’ requirement of the ‘long test’” under the FLSA, it adds. Since the adjusters worked “in the absence of immediate supervision the majority of the time and made decisions that were reviewed only after the estimate was written and the claim paid,” the Court says they had the power to make independent choices free from immediate director or supervision—another criteria for exempt administrative employees. Finally, the Court says, the decisions made involve “matters of significance,” since the auto damage adjuster “is empowered to negotiate with claimants and body shops and settles claims up to $10,000 or $15,000—all actions that bind [the company] financially.” Robinson-Smith v. GEICO