http://www.crainsdetroit.com/article/20110314/FREE/110319970#
Originally Published: March 14, 2011 2:39 PM Modified: March 14, 2011 5:54 PM
By Daniel Duggan
The case against Quicken Loans‘ overtime policies went to a jury today after five weeks of trial.
Jurors will be deciding whether 350 former employees should have qualified for overtime pay. At stake for Quicken is whether the mortgage company must pay time-and-a-half to the employees plus legal fees if it loses.
In closing arguments today before Judge Stephen Murphy III in the U.S. District Court’s Eastern District in Detroit, attorneys gave vastly different job descriptions for Quicken’s mortgage bankers.
One image was of salespeople forced to work 12-hour days and make enough sales to not be fired.
The other was of highly paid analysts helping consumers weather their debt situations.
The two scenarios fall on different sides of one legal point.
The case hinges on a portion of the labor law that spells out overtime. Specifically, an exemption from overtime requirements is given for financial services employees who have discretion to make decisions and whose duties are primarily office-related and focused on clients of the company.
But that exemption is not available for sales-oriented positions.
“Quicken Loans has made a lot of money and done well for itself, but it has made that money with a sales force, not with a bunch of analysts and advisers,” said Paul Lukas, an attorney with Minneapolis-basedNichols Kaster Attorneys at Law who is representing the plaintiffs.
But the plaintiffs in the case spent an average of 14 hours on the phone during a week that is almost 60 hours, said Jeff Morganroth of Morganroth and Morganroth PLLC in Birmingham, the firm representing Quicken.
He said overtime is paid to the “front line” staff who do cold calling, while the mortgage bankers spend nearly all of their time keeping up on market conditions, calling real estate agents, checking on the loans in their pipeline and trying to figure out the best loans for clients.
“This case is an insult to the overtime laws and to the people it was designed to protect,” Morganroth said.
He said it’s wrong to take one word — “sales” — and take it out of context to seek overtime after the fact.
Morganroth said the Quicken employees are no more salespeople than he is.
“I’m trying this case for Quicken, and if I win, maybe I’ll get more business or a referral for new business,” Morganroth told the jury. “Does that mean the primary duty of my job is sales?”
Morganroth went on to attack the reputation and testimony of the 20 witnesses called by the plaintiffs’ legal team.
He placed their photos on a large board and then explained how some lied on the stand or on their resumes or job applications. He placed signs saying “lied,” “exaggerated” and, for one witness, “fraud” on their photos.
Lukas, the plaintiffs’ attorney, used e-mails and recorded voice-mail messages that describe the sales side of working at Quicken. The messages came from all levels of management, from Chairman Dan Gilbert and CEO William Emerson down to sales managers.
The messages show an environment where people are forced to work long hours and always to be focused only on closing deals.
Lukas gave an example of a day when the mortgage bankers were told to “stand and deliver” and couldn’t sit in their chairs until they closed a loan.
He showed an e-mail explaining why a person was promoted, solely on his sales performance.
“He’s a salesman’s salesman,” Lukas said. “The keys to success, told by Dan Gilbert, is to sell, care about your team’s numbers and work long hours.”
If the verdict comes back in favor of the plaintiffs, the damages would be calculated by the judge. But the jury will decide how many hours per week the plaintiffs had worked.
The sparring already had started as to how the math would be done, given that the plaintiffs would receive time-and-a-half pay for the hours they worked.
The starting base pay for Quicken mortgage bankers is $24,000 per year, with commissions on top of that based on how they meet criteria. The number of loans closed is part of the formula, but more complex loans are given a higher value. Customer service is also factored in.
Morganroth said the plaintiffs are trying to take time-and-a-half based on the entire compensation, including commissions.
In one example, he said, one person made a salary of $29,000 plus $77,000 in commissions. Based on a 60-hour workweek, she would be owed $4,833 based on time-and-a-half from her salary. If that figure were based on her salary and commission, she’d get $17,000.
Another example was a person who made $30,000 from his salary and $160,000 in commissions and could get an extra $19,000 from this case.
“They want overtime on top of their commissions and salary,” Morganroth said. “This would be an unfair windfall.”
The jury will start deliberations Tuesday and continue until a verdict is reached.
No comments:
Post a Comment