ICYMI: Congressman’s former firm ordered to pay back OT, appeal planned
Burlington County Times
By David Levinsky
April 28, 2015
A California judge has ordered U.S. Rep. Tom MacArthur’s former insurance services firm, York Risk Services, to pay over $8 million in back overtime and interest to 122 employees who sued the company, but an attorney who defended the company says an appeal is planned.
MacArthur, R-3rd of Toms River, retired from the firm in 2010, but the labor lawsuit became an issue during his contentious congressional race last year against Democrat Aimee Belgard for the open seat held by Jon Runyan.
MacArthur won the U.S. House race by a nearly 10 percent margin and was sworn in to office in January.
The class action lawsuit alleged that York violated California labor laws by failing to pay its claims examiners overtime, even though they routinely worked more than 40 hours a week.
In its defense, York argued that the claims examiners were exempt from overtime pay requirements based on the established standards of California law.
The lawsuit was filed in 2008, about a year before MacArthur stepped down as the company’s CEO. He retired from the company in December 2010.
The case went to trial last May in Sacramento, and Superior Court Judge Michael P. Kenney ruled in favor of the plaintiffs in December, writing in his decision that York “failed to prove that the members qualify for the administrative exemption to the California overtime pay requirements.”
Kenney’s ruling was finalized on April 15, and York was ordered to pay $5.5 million in unpaid overtime to the plaintiffs, plus $2.6 million in interest and $918,900 in civil penalties.
Craig Diamond, a California attorney who defended York, said an appeal was planned, but he declined to comment further.
A spokesman for MacArthur also declined to comment on the ongoing litigation.
Although the legal dispute is in California, Belgard and her campaign referenced it repeatedly during the 2014 campaign, suggesting it was an example of MacArthur putting company profits ahead of workers.
During a joint interview with Belgard in September on NJTV, MacArthur defended his record, arguing that the company paid workers fairly and that the claims examiners were exempt based on California’s laws.
“Paying people fairly is how I built the company,” MacArthur said during the interview, adding later: “You can’t hold me (responsible) for a law that wasn’t on the books four years ago.”
The Democratic Congressional Campaign Committee later highlighted the lawsuit in a cable television ad, one of several it aired that focused on MacArthur’s past as CEO and board chairman of York.
The advertisements became controversial as the DCCC was forced to alter one ad highlighting lawsuits and complaints the firm faced from victims of hurricanes in Texas and wildfires in California, and it pulled another off the air after MacArthur’s campaign threatened legal action and provided information proving the Republican had not received compensation from the company beyond tax benefits owed him from a 2010 stock sale.
No Democrat has announced plans to run for MacArthur’s 3rd District seat, but the DCCC has already listed him among a group of first-term Republicans the committee plans to target next year.