Mortgage Lender Settles Underwriter Overtime Suit for $7.2 Million

A national fintech mortgage lender settled a long-running case asserting that the lender failed to pay its underwriters overtime pursuant to the federal Fair Labor Standards Act (FLSA) and similar state wage laws.

The suit was filed in the U.S. District Court for the Central District of California in 2020 on behalf of a group of underwriters who worked for the lender.  The plaintiffs claimed that the company improperly classified its underwriters as salaried employees who were exempt from receiving overtime pay, but that in fact they should have been classified as non-exempt employees who were entitled by law to overtime and certain other benefits.  The parties subsequently spent a large portion of the case—including an interlocutory appeal to the U.S. Court of Appeal for the 9th Circuit—litigating whether the employer improperly tried to convince the employees to resolve their claims individually instead of joining the suit, as well as whether the employees at issue were required to individually arbitrate their claims.

The parties have now entered into a settlement agreement to resolve the case and are seeking preliminary approval of the settlement from the court.  The settlement agreement provides for total payments of $7.185 million across the approximately 211 underwriter employees who are part of the suit.