Jury Hands Total Victory to Quicken Loans in Mortgage Loan Officer Overtime Case
Authored by Barry Miller
A Detroit jury has handed a major win to the defendant employer in an overtime case brought on behalf of mortgage loan officers, rejecting the plaintiffs’ argument that they were sales employees with limited decision-making authority. As we recently reported, the Henry v. Quicken Loans case went to the jury on Monday, March 14, after more than four weeks of testimony and closing arguments. The jury deliberated for about two and a half days and returned a defense verdict on Thursday afternoon, finding that the loan officers were properly subject to the FLSA’s administrative exemption and not entitled to overtime pay.
In entering a verdict for Quicken, the jury made two key findings. First, the jury found that Quicken’s loan officers had a primary duty that was the “performance of office or non-manual work directly related to the management or general business operations of Quicken Loans or its customers.” This finding is particularly significant, in that it is directly contrary to the Department of Labor’s Administrator’s Interpretation FLSA 2010-1, in which the agency opined that the primary job duty of mortgage loan officers working in the industry at large was sales and not any internal or administrative function. Given that the Administrator’s Interpretation did not appear to be based on any particular factual investigation undertaken by DOL, employers may argue that jury’s verdict in the Quicken case reflects that the Department of Labor’s conclusions about mortgage loan officers’ job duties were simply wrong, or at least have a less than universal applicability. This outcome may also affect the deference that courts are willing to extend to the Administrator’s Interpretation.
The jury also found that the plaintiff loan officers exercised discretion and judgment with respect to matters of significance. This determination is also significant because plaintiffs’ attorneys suing for overtime on behalf of mortgage loan officers routinely argue that the job involves only the rote application of lending guidelines and does not include the sort of sophisticated financial analysis that warrants application of the administrative exemption. Clearly, the jury in the Quicken case rejected that argument.
At the most fundamental level, what the Quicken verdict reflects is that employers who are willing to litigate misclassification cases to conclusion can win. The stakes in such cases are very high, and there is often tremendous pressure on the employer to settle in order to avoid the possibility of a catastrophic outcome at trial. This verdict, however, is likely to have reverberations throughout the mortgage lending industry, decreasing pressure on defendants to settle and decreasing the settlement value of other pending cases.