Charbonneau v. Mortgage Lenders of America, LLC

District Court, D. Kansas·Decided January 11, 2021·No. 2:18-cv-02062·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

BEAU CHARBONNEAU, on behalf of himself and others similarly situated,

Plaintiff, Case No. 2:18-cv-02062-HLT-ADM v.

MORTGAGE LENDERS OF AMERICA L.L.C., et al.,

Defendants.

MEMORANDUM AND ORDER Plaintiff Beau Charbonneau brings this putative collective action, on behalf of himself and all others similarly situated (“Plaintiffs”), under the Fair Labor Standards Act (“FLSA”) against Defendants Mortgage Lenders of America, L.L.C. (“MLOA”), Philip Kneibert, and Bradley Ives. The Court conditionally certified two separate FLSA classes (“Team Leads” and “Loan Officers”) on December 6, 2018. Doc. 45. Defendants now move to decertify Plaintiffs’ FLSA claims. Doc. 188. For the reasons explained below, Defendants’ motion is denied. I. BACKGROUND Defendant MLOA1 is a mortgage-lending company that employs over 300 lending professionals at its sole office in Overland Park, Kansas. MLOA’s lending professionals sell mortgage loans over the phone and internet. MLOA’s lending professionals include Loan Officers, Team Leads, and Directors. MLOA assigned its Loan Officers to different “teams,” and each team had a Team Lead who reported to one of three “Directors,” each of whom oversaw one of three

1 Defendant MLOA is currently known as Zillow Home Loans, LLC. In 2018, Zillow Group, Inc. acquired MLOA and, in connection with the acquisition, changed the corporate name of MLOA to Zillow Home Loans, LLC (“Zillow”). divisions. MLOA’s three Directors were Brian Kirk, Lisa Rockers-Nelson, and Brian Arnoldy. The Directors reported directly to Defendants Kneibert and Ives. MLOA employed Beau Charbonneau, the named plaintiff in this lawsuit, as a Loan Officer from January 2013-August 2013, and from August 2016-November 2017, and as a Team Lead from August 2013-August 2016. On December 6, 2018, the Court granted Plaintiff Charbonneau’s

motion for conditional certification of class claims under the relevant FLSA provision, 29 U.S.C. § 216(b). Specifically, the Court conditionally certified the following classes of employees: (1) All persons who are, have been, or will be employed by Defendants as “Team Leads,” “Team Leaders,” and other individuals with similar job titles within the United States at any time during the last three years through the entry of judgment in this case (“FLSA Team Lead Collective”); and

(2) All persons who are, have been, or will be employed by Defendants as “Loan Officers,” “Mortgage Loan Officers,” “Entry Level Loan Officers,” and other individuals who originated loan products with similar job titles within the United States at any time during the last three years through the entry of judgment in this case (“FLSA Loan Officer Collective”).

Doc. 45 at 5. In granting Plaintiff Charbonneau’s motion, the Court authorized him to send a Court- approved notice to others employed as Team Leads and Loan Officers during the previous three years. In total, 171 individuals filed consents to join this action. Four Plaintiffs voluntarily withdrew, leaving 167 Plaintiffs. A. Loan Officers MLOA classified all Loan Officers as non-exempt employees subject to the FLSA’s overtime requirements. Loan Officers’ compensation structure was set forth in standardized, written agreements. Loan Officers were expected to work “a minimum of 40 hours per week.” Doc. 192-8 at 1-2. MLOA utilized uniform job descriptions for Loan Officers and their job requirements included “originating mortgage loans” and “conducting borrower interviews,” as well as the following required tasks: • Following up on lead submissions and recording activity into contact management system; • Processing inbound and outbound calls through company phone system; • Educating borrowers on the loan process and assisting them in identifying the appropriate loan; • Collecting borrower financial/credit information; • Processing borrower credit/income information; • Presenting loan options for borrowers including rates and fees for loans; • Securing proper documentation and managing loan progress through the processing/closing; and • Maintaining in-depth knowledge of loan programs including; FHA, VA, USDA, and Conventional loan programs.

Doc. 192-10. MLOA has physical time clocks in its office for Loan Officers to report their time worked in the office. The time clocks require a password and biometric hand scan for employees to clock in and out. Thus, the time clocks only record work hours performed in MLOA’s physical office. However, Plaintiffs contend that Loan Officers regularly performed off-the-clock work on their cell phones and email while out of the office. This off-the-clock work included tasks that could be performed without logging into MLOA’s computer system, such as communicating with leads, borrowers, realtors, appraisers, and MLOA management, as well as obtaining loan documents and coordinating the loan process and closings. Plaintiffs contend that MLOA encouraged such off-the-clock work. In a company-wide email sent on January 13, 2016, and again on September 27, 2017, Defendant Kneibert sent a “friendly reminder regarding various policies related to life at MLOA.” He stated that the “LO should be available when his/her file is closing,” and if they are “not going to be in the office when a file closes,” they should notify the closer and their Team Lead. He then reminded employees that they are required to clock out if they are leaving the building. And he also encouraged employees to forward their office phone to their cell phone, noting that this “is especially important for our LOs” as “[m]any LOs have captured deals by having phones forwarded during the weekend.” Doc. 192-36 at 2, 5. MLOA also directed Loan Officers to include their cell phone number on their MLOA email signature and business cards so customers and other parties involved in the loan

process could contact them when they were not in office. MLOA similarly directed Loan Officers to have their work email set up on their cell phones so they could communicate while out of the office. MLOA’s Loan Officer Agreement stated that Loan Officers were required to obtain written permission in advance before overtime work is performed, and that unauthorized overtime work could result in disciplinary action. The Agreement further provided: Officer is required to use the MLOA time clock system to record Officer’s hours worked. Officer shall notify Officer’s [Team Lead] as soon as possible, if Officer misses or incorrectly records an entry into the timekeeping system. In that case, MLOA has the right to adjust the time clock record to accurately report the time Officer worked.

Doc. 189-7 at § 5.3. Until 2017, if a Loan Officer missed a time clock punch, they were expected to contact their Team Lead to request corrections. After 2017, MLOA centralized the time-record-correction process with Human Resources by creating a “time-card corrections” email account. During discovery, MLOA produced approximately 1,500 emails that had been sent to the time-card corrections email account. During her deposition, MLOA’s HR Director testified that she could not recall receiving any email or notification from any Loan Officer asking that time be added to their timecard for work performed out of the office on their cell phone.

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Charbonneau v. Mortgage Lenders of America, LLC, (D. Kan. 2021).

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