The Sixth Circuit recently weighed in on the hot topic of whether mortgage loan officers fall within the administrative exemption to the Fair Labor Standards Act (“FLSA”). The Sixth Circuit upheld a jury verdict in favor of the employer, which applied the administrative exemption of the FLSA to mortgage bankers and rejected the employees’ argument that their main duty was making sales. In Henry v. Quicken Loans, Inc., the Sixth Circuit upheld the verdict reached by a Detroit federal jury (after a five-week trial), where the jury concluded that a group of nearly 450 mortgage bankers fell within the FLSA’s administrative exemption; and therefore, the employer, Quicken Loans, did not violate the FLSA by failing to pay them overtime wages. 

At issue in the case were two parts of the administrative exemption test: (1) whether the employees’ primary duty was the performance of work directly related to the management or general business operations of the employer or its customers; and (2) whether the employees’ primary duty included the exercise of discretion and independent judgment on matters of significance. 

As to the “management-related” prong, the Court noted that “primary duty” means the chief or most important duty performed by the employee, and not the most time-consuming. Because numerous witnesses testified at trial that their duties included collecting and analyzing customer financial information, determining which products best met a customer’s needs, and promoting and advising customers regarding the advantages and disadvantages of certain products, ample evidence existed to support the jury’s finding that the mortgage bankers’ “primary duty” satisfied the management prong. 

As to the discretion-and-independent-judgment test, the Court explained that even though mortgage bankers’ decisions were subject to guidelines and  supervisory checks, they still exercised discretion on a day-to-day basis. The employees made recommendations to clients and helped select the proper mortgage loan based on a customer’s needs.  

Because sufficient evidence existed for a reasonable jury to find for Quicken Loans on these fronts, the Sixth Circuit did not disturb the jury’s determinations, which included credibility determinations over the contradictory evidence presented by the parties as to the mortgage bankers’ primary duty.

The Court also rejected Plaintiffs’ attempt to rely upon certain DOL opinion letters or other district court cases to suggest that the decision regarding the exemption should have been made by the court as a matter of law (and not by the jury). As the Court noted, in some cases, genuine issues of material fact remain over the application of an exemption to a particular job, as it actually is carried out; and the case may need to be tried. In the end, this case is a victory for employers, reminding them that while the cost of gaining a verdict in these cases may be great, victory can be achieved. This case also serves as a reminder that actual job duties matter, not simply job labels or titles.