Mortgage Lender's Reasonable Reliance on DOL Opinion Letter Constitutes Good Faith
On September 30, 2009, the United States District Court for the Eastern District of Michigan, in Henry v. Quicken Loans, Inc., 2009 WL 3199788, held that a mortgage lender-employer acted in good faith when it demonstrated that it had reasonably relied upon the September 2006 U.S. Department of Labor Opinion Letter when determining whether its loan officers qualified for the “administrative exemption” to the Fair Labor Standard Act and were therefore ineligible for overtime.
As discussed previously, the issue was initially determined in July by a federal magistrate judge who ruled that an employer’s reasonable reliance on the September 2006 DOL Opinion Letter, as established through affidavit testimony of corporate executives, constituted good faith as a matter of law. This ruling, contained in the magistrate’s report and recommendation, was adopted and confirmed by the district court and, therefore, the employer faces no liability for potentially misclassifying its loan officers from the date of the DOL letter, September 8, 2006, onward. The court also adopted the magistrate’s decision denying the parties’ cross-motions for summary judgment on the merits of the employer’s affirmative defense, based upon the exemption.
This entry was written by Andrew Voss.
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rs”) for Quicken Loans, a large on-line mortgage lender. Quicken Loans classified its loan consultants as exempt from the overtime obligation imposed by the FLSA, in reliance upon the administrative exemption. The plaintiffs claimed, relying upon Quicken Loans’ hiring, training, and process documentation, as well as internal email, that they were primarily responsible for “selling” mortgage loans. If their primary duty was “sales,” the plaintiffs argued, they could not be considered exempt administrative employees.