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MetLife hit with $50 million class action lawsuit

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A putative class action filed Tuesday in federal court in Connecticut accuses MetLife and two of the insurer’s subsidiaries of withholding more than $50 million in earned overtime pay from claims specialists since 2013.

The suit, filed on behalf of a former MetLife long-term disability claim specialist, said the company reclassified all such workers as “exempt” from overtime pay regulations in late 2013 as a “cost-cutting measure even though their job responsibilities did not change.”

Related: MetLife to suspend individual disability sales

According to the complaint, plaintiff Stephanie McKinney routinely worked between 10 and 20 hours of overtime weekly until she left the company last July, often from home at night and on weekends.

The suit was filed by Milford solo Daniel Schneider and a team of lawyers with New York’s Sanford Heisler including Jeremy Heisler, Andrew Melzer, Michael Palmer and David Tracey.

In an interview, Palmer said that the potential number of class members is over 1,000­. “Exactly how much over 1,000 we don’t know yet,” Palmer said. “It could be two or three times that. We have to look at the company’s records.”

MetLife’s vice president for finance and investment, John Calagna, said via email that the insurer has not had time to review the complaint and would have no comment.

Until late 2013, both long-term disability and short-term disability specialists were classified as nonexempt, hourly employees and paid overtime compensation, the suit states. “Accordingly,” the complaint alleges, “MetLife was fully aware that LTD claim specialists commonly worked over 40 hours per week.” After the reclassification, short-term disability specialists retained their hourly employee status while their long-term disability colleagues lost their overtime.

Specialists such as McKinney handle claims for corporate clients including Verizon, Morgan Stanley and Campbell’s Soup, it said, and their duties include gathering medical and other information from claimants and forwarding it to other staffers or managers “who gave opinions on whether to take action on a claim.”

The suit claims violations of the federal Fair Labor Standards Act and the Connecticut Minimum Wage Act.

According to the suit, McKinney first filed a complaint against MetLife with the Connecticut Department of Labor, which, after conducting an investigation, told her that MetLife “misclassified her position as exempt” because she “had no direct reports, no advanced education, and could not make independent decisions.”

“In lieu of further pursuing a remedy with the Connecticut Department of Labor,” McKinney opted to file the federal complaint, the suit states.

Palmer said that he is unaware of any justification MetLife has ever offered for the reclassification, and believes the suit is the first to challenge it.

He said a primary reason McKinney left the company was the additional hours she was expected to work with no pay.

“Overtime rules have two justifications,” said Palmer. “One is to ensure that people aren’t worked to death and to encourage companies to hire the staff they need. Number two is to make sure the people they hire are fairly compensated for spending all their time working.”

The complaint said MetLife reported $5.2 billion in net income in 2015.

According to its website, MetLife and its subsidiaries serve about 100 million customers in nearly 50 countries, including more than 90 of the top 100 U.S. companies listed in the Fortune 500.

See also:

Derivatives hit contributes to $2.1 billion MetLife net loss

MetLife files for spinoff of U.S. unit after weighing IPO

MetLife defends its SIFI challenge

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