Trembly Law Firm Successfully Defends Client Against FLSA Overtime and Minimum Wage Claim in Arbitration, and Obtains Important Ruling that Mortgage Loan Originator was an “Exempt Employee” under FLSA
There has been a tidal wave of new claims being filed by mortgage loan originators claiming overtime and minimum wage violations under the Fair Labor Standards Act (FLSA). While many mortgage companies have taken to defend these claims by arguing that the mortgage loan originators are exempt as outside salespersons, the results have been less than consistent. This has caused several mortgage companies many sleepless nights, due to the lack of any major guidance on the issue.
Trembly Law Firm was retained to defend a large mortgage company (“respondent”) in an arbitration filed by a mortgage loan originator (“claimant”). The claimant had contracted to sell and originate mortgages for respondent. The contract outlined his obligations to work outside of the office and outside of his home. The claimant argued that he never worked outside of his home and that he worked in excess of 60 hours a week.
From the get-go, the Trembly Law litigation team identified that the primary argument in favor of the company was to argue that the mortgage loan originator was exempt under the FLSA as an outside salesperson.
Senior attorney, Kevin Pardiñas, was put in charge of the defense. Mr. Pardiñas went to work, arguing that the contract clearly outlined the claimant’s duties and obligations and that there was never any knowledge or agreement by the respondent for claimant to work out of his home and to stop going out into the community to originate loans. In the end, Mr. Pardiñas successfully convinced the arbitrator to find the mortgage loan originator was an outside salesperson, exempt from the requirements of the FLSA. The arbitrator was persuaded by the argument that claimant could not unilaterally change his duties and obligations, without notifying his employer, and then file a “gotcha” FLSA claim.
While the arbitration decision is not binding on a court of a law, it is a very welcomed decision in favor of employers (especially mortgage companies) and provides some much-needed guidance on what to do (or not to do) with their mortgage loan originators.
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(About the Firm) — Trembly Law Firm
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