The Words Matter: No Insurance Coverage for Wage and Hour Class Action

Despite finding that the syntax in its Employment Benefits Liability (EBL) endorsement was "not the best," a California court of appeal held that Mid-Century Insurance Company did not owe a defense or indemnity to eight car dealerships for class action wage and hour claims brought by auto mechanics.  Mid-Century Insurance Company v. Robert Zamora et al., case no. C069644, California Court of Appeal, Third Appellate District (October 4, 2013).   In so ruling, the court refused to adopt an interpretation of a clause in the endorsement that would have expanded coverage beyond the scope of the endorsement as a whole.

The mechanics alleged multiple violations of federal and state laws based on underpayment of wages and resulting reductions in social security benefits.  The mechanics  claimed that they were paid on a piece-rate system, which left them unpaid for time when they are not working on a repair job, but still are required to be at work.  Their motion for class