As an Atlanta, Georgia Minimum Wage, Unpaid Overtime and Employment Attorney, I closely watch court decisions discussing the Fair Labor Standards Act and its numerous exemptions to the minimum wage and overtime requirements. If you or your Atlanta business are in need of an Atlanta employment lawyer, Atlanta unpaid overtime attorney or Atlanta business litigation attorney, the Golden Law Firm, LLC may be able to assist you. Contact an attorney to learn more about your rights and responsibilities.
In Henry, et al. v. Quicken Loans, Inc., the United States Court of Appeals for the Sixth Circuit examined an appeal by the plaintiffs of a jury verdict in favor of the defendant, Quicken Loans, Inc. on the plaintiffs' claim that they were entitled to overtime compensation for all hours worked in excess of 40 during a given workweek. The plaintiffs were employed by Quicken Loans as mortgage bankers. They alleged that they were essentially inside salespersons, not exempt from the Fair Labor Standards Act's minimum wage and overtime requirements. Quicken Loans, however, asserted that its mortgage bankers were exempt from the FLSA's minimum wage and overtime requirements under the so-called "Administrative Exemption." At trial, the jury agreed with Quicken Loans. The Sixth Circuit Court of Appeals has now affirmed that jury verdict.
The dispute boiled down to whether the plaintiffs and those similarly situated were mere salespersons or something more. The issue was dispositive because, under the Fair Labor Standards Act, employees must be compensated at time and one half their regular rate of pay for any hours worked in excess of 40 in a given workweek, unless they fit within one of the FLSA's narrow exemptions. 29 U.S.C. §207(a)(2). One such exemption is the Administrative Exemption. It exempts from the FLSA's overtime requirement, those employees: (1) Compensated...at a rate of not less than $455 per week...; (2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and (3) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. 29 C.F.R. §541.200(a).
There was no dispute that the first prong of the exemption was met. However regarding the second and third prongs, the jury first found, and the Sixth Circuit has now agreed, that the mortgage brokers' primary duty was related to the management or general business operations of Quicken Loans (the second prong of the Administrative Exemption) and also that the primary duty of mortgage brokers includes the exercise of discretion and independent judgment with respect to matters of significance (the third prong of the Administrative Exemption). To that end, the jury found that Quicken Loans' mortgage brokers' main duty was not simply selling financial products, which would otherwise not include the exercise independent judgment and discretion.
Rather, the jury found believable, the testimony of many witnesses who resisted the notion that their job could be boiled down to that of selling financial products, but instead include the preparation and implementation of strategies for clients to achieve their financial goals and manage their mortgages more effectively. Further, the jury found believable the testimony from some mortgage brokers who were not plaintiffs that it was entirely up to them which financial products to recommend to a client and thus, they exemplified sufficient discretion and independent judgment to satisfy the third prong. Of the Administrative Exemption. While there was conflicting testimony on these issues, In the eyes of the Sixth Circuit, a reasonable jury could have sided with the defendant. Thus, the jury verdict would not be disturbed.
This case is a good reminder that the Administrative Exemption can be a strong defense to unpaid overtime claims. Employers are well served to conduct an FLSA audit to determine whether this or other exemptions may apply to your workforce before a lawsuit is filed. Often, counsel can work with you to better structure the specific job positions in question to give your business a better chance of fitting certain positions within the exemptions in the event of a lawsuit or Department of Labor audit.
If you have questions regarding protecting your Company from unpaid overtime claims or are in need of an FLSA or Human Resources audit, contact the Atlanta FLSA attorney and Atlanta unpaid overtime attorney, Peter Golden at The Golden Law Firm, LLC. At The Golden Law Firm, LLC we handle employment law and business litigation for small businesses, middle market companies, Fortune 100 corporations and individuals. Call us at 678-710-8244 or visit our website at www. Golden-firm.com. We are located in the heart of the Vinings neighborhood of Atlanta, one block from I-285 and easily accessible from throughout metro Atlanta.