Second Circuit Rules that Insurance Underwriters Not Covered by FLSA’s Administrative Exemption

On November 20, 2009, the Second Circuit decided Davis v. J.P. Morgan Chase & Co., 2009 U.S. App. LEXIS 25481 (2d Cir. Nov. 20, 2009), wherein it reversed a summary judgment finding against a loan underwriters who allege that they are entitled overtime pay under the FLSA. The Court flatly rejected the district court’s holding that such employees are covered by the FLSA’s administrative exemption. This is an important victory for loan underwriters, loan officers, staff accountants, non-licenced accountants, bank tellers, and other financial service employees who are frequently misclassified as FLSA exempt. The Court emphasized that, to fall within the administrative exemption, employees perform work that is related to the management policies or general business operations. In other words, true administrative employees are “at the heart of the company’s business operations,” and those “functional” employees who perform day-to-tasks of the business – even if those tasks are comples — are not covered by the exemption. In sum, this is a big victory for the plaintiffs and their New York overtime lawyers.

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