The Detroit News
Sides see no end through mediation to 6-year court fight
Quicken Founder Dan Gilbert
A court-ordered mediation next week is unlikely to resolve a six-year legal battle between Quicken Loans Inc. and more than 1,400 former loan officers over whether they are owed overtime pay.
Detroit U.S. District Court Judge Stephen Murphy set up the hearing for Thursday to try to work out a settlement after the U.S. Department of Labor in March reversed a Bush-era ruling and decided the employees are eligible for the extra pay. The mediation doesn't cover all of the ex-loan officers, some of whom have been battling Quicken since 2004.
"We don't expect too much from" the mediation, said Donald Nichols of the Minneapolis--based Nichols Kaster law firm, a lead attorney for the loan officers.
"Quicken has said all along they will appeal any decision" that is unfavorable to the company, Nichols said.
Quicken reinforced that notion Friday when it said in a statement: "This lawsuit was initiated by an out-of-state law firm which specializes in filing meritless claims in an effort to coerce settlements from job-producing companies which employ highly compensated white-collar professionals. The company remains strongly committed to defending this meritless claim where we expect to defeat this self-serving plaintiff law firm's parasitic action."
The Labor Department reversal complicates Quicken's fight against the former loan officers, who charge in four lawsuits that the online mortgage company wrongly classified them as administrative employees exempt from hourly overtime pay.
Murphy said last month the new Labor Department interpretation of how the Fair Labor Standards Act applies to Quicken loan officers could lead to reopening three cases that were decided in Quicken's favor.
If courts reactivated the settled cases, the potential damages for Quicken could rise to more than $30 million, plaintiffs' attorney Nichols said.
But Quicken interprets the impact of the Labor Department's decision differently.
"The Department of Labor's recent reversal regarding whether loan officers are eligible for overtime contradicts its earlier pronouncements," according to Quicken's statement. "It should not have any effect on existing litigation, as it only applies to cases going forward."
The Livonia-based company, which is planning on moving 1,700 workers to new offices in downtown Detroit next month, also argued the case has no merit.
"It had no merit when it was filed (more than six years ago), and it has no merit today," according to the company's statement.
"Quicken Loans has and does follow all labor regulations and laws, paying overtime to every team member who is morally, ethically and legally entitled to receive it. Our mortgage bankers have always been rewarded fairly and generously," said the statement.
The company added that the Department of Labor's ruling has not "measurably" changed the work hours of current mortgage loan officers.
In the past, Quicken founder Dan Gilbert has said loan officers can earn far more money through commission and bonuses than overtime pay.
In 2006, an attorney for the Mortgage Bankers Association, who also was representing Quicken in an overtime lawsuit, asked the Department of Labor for a ruling about mortgage bank employees. This led to the original Bush Labor Department decision that the Quicken employees didn't qualify for overtime pay.
But attorneys for the former Quicken workers asked the Labor Department to review that decision. After Barack Obama took office, the agency decided in March to overturn the Bush-era interpretation.
The Labor Department's reinterpretation is not surprising because agency decisions often change when a different political party wins the White House, said Bruce Miller, a partner at Miller & Cohen PLC, a Detroit labor law firm.
"Republicans tend to narrow the interpretation of who is eligible, and Democrats tend to broaden the definition," Miller said.
Various business magazines have consistently named Quicken as a top U.S. company to work for. It has been ranked in the "Top 30" of Fortune's "100 Best Companies to Work for in America" for the past seven years and ranked as one of the top 15 of Computerworld magazine's "100 Best Places to Work in Technology" for six consecutive years.
Detroit U.S. District Court Judge Stephen Murphy set up the hearing for Thursday to try to work out a settlement after the U.S. Department of Labor in March reversed a Bush-era ruling and decided the employees are eligible for the extra pay. The mediation doesn't cover all of the ex-loan officers, some of whom have been battling Quicken since 2004.
"We don't expect too much from" the mediation, said Donald Nichols of the Minneapolis--based Nichols Kaster law firm, a lead attorney for the loan officers.
"Quicken has said all along they will appeal any decision" that is unfavorable to the company, Nichols said.
Quicken reinforced that notion Friday when it said in a statement: "This lawsuit was initiated by an out-of-state law firm which specializes in filing meritless claims in an effort to coerce settlements from job-producing companies which employ highly compensated white-collar professionals. The company remains strongly committed to defending this meritless claim where we expect to defeat this self-serving plaintiff law firm's parasitic action."
The Labor Department reversal complicates Quicken's fight against the former loan officers, who charge in four lawsuits that the online mortgage company wrongly classified them as administrative employees exempt from hourly overtime pay.
Murphy said last month the new Labor Department interpretation of how the Fair Labor Standards Act applies to Quicken loan officers could lead to reopening three cases that were decided in Quicken's favor.
If courts reactivated the settled cases, the potential damages for Quicken could rise to more than $30 million, plaintiffs' attorney Nichols said.
But Quicken interprets the impact of the Labor Department's decision differently.
"The Department of Labor's recent reversal regarding whether loan officers are eligible for overtime contradicts its earlier pronouncements," according to Quicken's statement. "It should not have any effect on existing litigation, as it only applies to cases going forward."
The Livonia-based company, which is planning on moving 1,700 workers to new offices in downtown Detroit next month, also argued the case has no merit.
"It had no merit when it was filed (more than six years ago), and it has no merit today," according to the company's statement.
"Quicken Loans has and does follow all labor regulations and laws, paying overtime to every team member who is morally, ethically and legally entitled to receive it. Our mortgage bankers have always been rewarded fairly and generously," said the statement.
The company added that the Department of Labor's ruling has not "measurably" changed the work hours of current mortgage loan officers.
In the past, Quicken founder Dan Gilbert has said loan officers can earn far more money through commission and bonuses than overtime pay.
In 2006, an attorney for the Mortgage Bankers Association, who also was representing Quicken in an overtime lawsuit, asked the Department of Labor for a ruling about mortgage bank employees. This led to the original Bush Labor Department decision that the Quicken employees didn't qualify for overtime pay.
But attorneys for the former Quicken workers asked the Labor Department to review that decision. After Barack Obama took office, the agency decided in March to overturn the Bush-era interpretation.
The Labor Department's reinterpretation is not surprising because agency decisions often change when a different political party wins the White House, said Bruce Miller, a partner at Miller & Cohen PLC, a Detroit labor law firm.
"Republicans tend to narrow the interpretation of who is eligible, and Democrats tend to broaden the definition," Miller said.
Various business magazines have consistently named Quicken as a top U.S. company to work for. It has been ranked in the "Top 30" of Fortune's "100 Best Companies to Work for in America" for the past seven years and ranked as one of the top 15 of Computerworld magazine's "100 Best Places to Work in Technology" for six consecutive years.
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