Quicken Verdict Gives Employers Hope on OvertimeMay 2011 – Articles Workforce Management
Wage-and-hour lawsuits are growing, but a jury verdict in a major class-action lawsuit against Quicken Loan Inc. could provide some relief.
The jury decided against 359 former loan officers by finding that Quicken did not misclassify them as administrative employees exempt from overtime compensation. This saved the company as much as $30 million in damages.
"Insofar as certain financial services employees may no longer be pigeonholed as nonexempt, this verdict is a signal of hope for the employer community," says Mark Tabakman.
It is unclear whether financial services employers should take the same approach as Quicken regarding overtime claims. Tabakman says the "conservative answer" for employers is to treat employees as nonexempt. But with employees often working 50 to 60 hours a week, that can mean paying out "millions of dollars on the front end" just to avoid the risk of being sued.
"The bottom line is that lending companies whose underwriters are mainly responsible for the production and/or sale of loans, as opposed to the management and operation of the business, face significant risk and should engage in an internal examination of these types of classifications,"Tabakman says.