On March 17, 2011, a Michigan jury returned a verdict in favor of loan company, Quicken Loans Inc., in a federal class action wage and hour lawsuit. The jury found that the company’s loan officers were properly classified as exempt employees under the Fair Labor Standards Act (FLSA), and as a result, the company did not owe the plaintiffs any overtime. Henry v. Quicken Loans Inc.
The employees had argued that their primary duty was to sell loans, and therefore they do not fall within the administrative exemption. To support their claim, the employees relied upon the Department of Labor’s (DOL) Administrator’s Interpretation issued in March of 2010, which concluded that mortgage loan officers did not meet the administrative exemption to overtime under the FLSA. In reversing its prior interpretation on this very issue, the DOL’s Administrative Interpretation noted that a typical mortgage loan officer’s primary duty of selling loans was akin to performing production work for an employer rather than performing work related to the management or general business operations of the employer or the employer’s customers.
The jury rejected the DOL’s Administrator’s Interpretation. Instead, the jury found that the mortgage loan officers were engaged in “sophisticated financial analysis” and that they exercised discretion and independent judgment with respect to significant matters, thereby concluding that they met the administrative exemption under the FLSA. While this is a positive sign that a court or jury may not defer to the DOL’s Administrator’s Interpretation on this issue, employers still need to carefully make classification decisions based on the facts related to each specific job.