Amerigroup Agrees to Pay $4.5 Million Overtime Settlement

Amerigroup Corp. (AGP), the government health-plan manager, agreed to a $4.5 million settlement with marketing representatives who accused the company of not paying them overtime, according to a court filing.

The workers asked the court for final approval of a deal that would include more than 940 current and former New York marketing representatives responsible for signing up eligible recipients of Medicaid, according to a filing yesterday in federal court in Brooklyn, New York.

Amerigroup, which helps states manage health coverage for the poor, is slated to be acquired for $4.9 billion by WellPoint Inc. (WLP), the second-largest U.S. health insurer, under a deal announced this month.

“It makes more business sense to stay closer to the line of the law and to pay people for the many, many hours of overtime that they work,” Rachel M. Bien, a lawyer for the plaintiffs, said today in a phone interview.

The case, brought by workers Hamel Toure and Andrea Burch, accused Virginia Beach, Virginia-based Amerigroup of violating the federal Fair Labor Standards Act and New York labor law by misclassifying marketing representatives as exempt “outside salespeople.”

Maureen C. McDonnell, an Amerigroup spokeswoman, and Kristin Binns of Indianapolis-based WellPoint didn’t immediately respond to calls seeking comment on the settlement.

The case is Toure v. Amerigroup Corp., 10-cv-05391, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Christie Smythe in New York at csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net