Jackson v. Fed. Nat'l Mortg. Ass'n

• Decision Date: 29 March 2016
• Docket Number: CIVIL ACTION NO. 1:15-CV-01411-AT
• Citation: 181 F.Supp.3d 1044
• Parties: Cassie Jackson, on behalf of herself and all others similarly situated, Plaintiff, v. Federal National Mortgage Association d/b/a Fannie Mae, and Open Systems Technologies, Inc., Defendants.
• Court: U.S. District Court — Northern District of Georgia

181 F.Supp.3d 1044

Cassie Jackson, on behalf of herself and all others similarly situated, Plaintiff,

v.Federal National Mortgage Association d/b/a Fannie Mae, and Open Systems Technologies, Inc., Defendants.

CIVIL ACTION NO. 1:15-CV-01411-AT

United States District Court, N.D. Georgia, Atlanta Division.

Signed March 29, 2016

Amanda A. Farahany, Victor Severin Roberts, Benjamin Andrew Stark, Barrett & Farahany, LLP, C. Andrew Head, Jerilyn Elaine Gardner, Head Law Firm, LLC, Atlanta, GA, for Plaintiff.

Teresa Lynn Reuter, Sarah M. Konsky, Sidley Austin LLP-IL, Chicago, IL, Wendy Lazerson, Sidley Austin LLP, Palo Alto, CA, Scott Gilbert Blews, Taylor English Duma LLP, Atlanta, GA, for Federal National Mortgage Association.

Brian D. Shekell, David M. Cessante, Clark Hill, PLC, Detroit, MI, R. Patrick White, Casey Gilson P.C., Atlanta, GA, Stephanie K. Rawitt, Clark Hill PLC, Philadelphia, PA, for Defendant Open Systems Technologies.

ORDER

Amy Totenberg, United States District Judge

This matter is before the Court on Plaintiff's First Motion to Certify Class for Conditional Collective Action Certification and Issuance of Notice to Class [Doc. 31], Open Systems Technologies, Inc.'s Motion to Dismiss Opt-in Plaintiffs and Motion to Strike Collective Action Allegations [Doc. 38], and Plaintiff's Motion to Toll the Statute of Limitations for Opt-in Plaintiffs to Bring Individual Suits [Doc. 54]. For the reasons provided in this Order, Plaintiff's Motion to Certify is GRANTED as provided herein; Open Systems' Motion to Dismiss and Motion to Strike is DENIED ; and Plaintiff's Motion to Toll the Statute of Limitations is DENIED WITHOUT PREJUDICE .

I. Factual Background

Plaintiff Cassie Jackson filed this putative class action, alleging that Defendants failed to pay her and other credit underwriters overtime wages in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 -219. (Am. Compl. ¶¶ 2, 19.) Defendant Fannie Mae "is a government-sponsored entity that operates in the secondary mortgage market." (Fannie Mae's Resp. at 4 (citing 12 U.S.C. §§ 1716, 1719 ).) Following the mortgage crisis, Fannie Mae sought to have a sample of defaulted loans it owned reviewed by "experienced credit underwriters" so that it could determine whether or not to sell those loans back to the entities it bought them from. (Kirk Decl. ¶¶ 3-4.) Fannie Mae contracted with eight different staffing vendors, including Defendant Open Systems, to supplement its existing credit underwriting capabilities and complete these reviews at its Atlanta, Georgia office. (Id. ¶¶ 8-9; St. Clair Decl. ¶ 4, Doc. 39-3.) Fannie Mae treated all underwriters provided by the vendors as contractors of Fannie Mae and employees of the respective vendors. (St. Clair Decl. ¶ 4.) Fannie Mae treated underwriters not provided by staffing companies as W-2 employees. (Kirk Decl. ¶ 28; Am. Compl. ¶ 13.) Fannie Mae typically employed "60-80" credit underwriters at its Atlanta office. (Jackson Decl. ¶ 3.)

Defendant Open Systems hired Plaintiff as an underwriter on July 23, 2012 and placed her with Fannie Mae. (Bernetich Decl. ¶ 4, Doc. 36-2; Jackson Decl. ¶ 2.)

During this time, Open Systems treated Plaintiff and its other Fannie Mae underwriters as non-exempt W-2 employees.¹ (Bernetich Decl. ¶¶ 4-5; Am. Compl. ¶¶ 28.)

Jackson defines the collective class she seeks to represent and for whom she seeks to send "opt-in" notices for purposes of the collective action as follows: "[A]ll hourly paid credit underwriters that worked in Defendant Fannie Mae's Atlanta, Georgia office while being treated as independent contractors by Fannie Mae at any time during the last three years." (Pl.'s Br. at 2.) Plaintiff supports her Motion and the allegations stated in the Amended Complaint with her own declaration and the declarations of four other former Fannie Mae credit underwriters. Jackson and these opt-in plaintiffs claim to be similarly situated with respect to their job requirements and pay provisions because each was treated as an independent contractor by Fannie Mae, and claims that Fannie Mae prohibited the reporting of overtime, despite subjecting contractors to production quotas that required more than forty hours per week to satisfy. (Jackson Decl. ¶ 9; Hawkins Decl. ¶ 9; Stewart Decl. ¶ 9; Tolbert Decl. ¶ 9; Hill Decl. ¶ 9, Doc. 31-6.) To date, the four additional declarants and six other additional plaintiffs have filed "Consent to Join Collective Action" forms with the Court. (See Docs. 7, 11-13, 30, 48, and 59.)

Plaintiff makes two primary allegations in support of her claim for violations of the FLSA. First, Plaintiff argues that Defendant Fannie Mae maintained a policy of misclassifying Plaintiff and other credit underwriters placed at Fannie Mae by staffing agencies as "independent contractors" despite the fact that they performed the same duties as W-2 underwriters. (Am. Compl. ¶¶ 50-51.) Plaintiff claims that during the past three years, all credit underwriters, regardless of whether they were treated as W-2 employees or independent contractors, worked in close proximity to one another, attended work meetings together, and reported to the same supervisors.² (Jackson Decl. ¶¶ 5, 19.) They also performed the same job duties: credit underwriters performed secondary review of loans that Fannie Mae had purchased to ensure that all applicable documentation had been provided by the seller. (Id. ¶ 5.) All credit underwriters pulled loans to review from the same pool and all were subject to daily supervision by Fannie Mae "credit underwriting managers." (Id. ¶¶ 19, 21.) Plaintiff also alleges, both W-2 and independent contractor credit underwriters working on site at the Atlanta office had to review the same number of loan files each day.³ (Id. ¶ 21.) Finally, Plaintiff claims that many underwriters classified by Fannie Mae as independent contractors worked for Fannie Mae for more than two years. (Id. ¶ 23.)

Second, Plaintiff claims that both Fannie Mae and Open Systems knew or had reason to know that Fannie Mae credit underwriters regularly worked in excess of forty hours in a week without receiving overtime compensation. (Am. Compl. ¶ 61.) Specifically, Plaintiff alleges that Fannie Mae subjected credit underwriters to production quotas that inherently required overtime hours, yet it prohibited credit underwriters from reporting any overtime hours until they met those quotas. (Jackson Decl. ¶ 8.) For example, if Fannie Mae assigned an underwriter a quota of three loan files per day, that underwriter could not report any overtime hours for that week unless the quota had been met, irrespective of whether meeting that quota necessarily required overtime work. (Id. ¶ 9.)

Plaintiff asserts that Fannie Mae's practice of requiring off the clock overtime was "common knowledge at the office and simply accepted as part of the job." (See e.g. , Jackson Decl. ¶ 11; Tolbert Decl. ¶ 11, Doc. 31-5; see also Jackson Decl. ¶ 10 ("[I]t was a near universal practice of credit underwriters to work overtime hours off the clock to meet our production requirements.").) According to Jackson, Fannie Mae management employees, including credit underwriting managers, communicated this policy to credit underwriters during departmental meetings and through emails restating the directive not to report overtime. (Jackson Decl. ¶ 15; Stewart Decl. ¶ 13, Doc. 31-4.) Another underwriter claimed that her supervisor sent emails encouraging his team to work on the weekends despite the fact they had already worked in excess of forty hours to complete their base production requirements. (Hawkins Decl. ¶ 13, Doc. 31-3.)

Plaintiff also alleges that, in or about July 2014, Fannie Mae asked its W-2 credit underwriters to provide it with estimates of their overtime hours worked. (Jackson Decl. ¶ 13; Kirk Decl. ¶ 30.) After an arbitrator found that Fannie Mae letter review underwriters no longer qualified for an administrative exemption, Fannie Mae reclassified its W-2 credit underwriters from exempt to non-exempt status, and retroactively paid overtime wages to any W-2 underwriters that reported working more than forty hours in a week.⁴ (Am. Compl. ¶ 22; Kirk Decl. ¶¶ 28, 30.) Fannie Mae did not pay, or arrange to pay, any back wages to credit underwriters classified as independent contractors like Jackson. (Jackson Decl. ¶ 13.)

Defendants Fannie Mae and Open Systems each filed a Response to the Motion. Fannie Mae offers the declarations of several employees that work with or within the credit underwriting department. Multiple credit underwriting managers asserted that they never instructed contractors not to report hours worked and further stated that doing so would violate Fannie Mae policy. (Harger Decl. ¶ 12, Doc. 39-4; Olas Decl. ¶ 4, Doc. 39-5; Stoddard Decl. ¶¶ 12, 19, Doc. 39-6; White Decl. ¶ 6, Doc. 39-7.) According to Koren St. Clair, a Procurement Manager in Fannie Mae's Contractor Resource Center, Fannie Mae required all contractor credit underwriters to report "every minute" worked. (St. Clair Decl. ¶¶ 1, 15.)

Fannie Mae contractors reported time in an online tool called Fieldglass. (Id. ¶ 6.) St. Clair explains that Fieldglass reports were subject to review and verification by Fannie Mae underwriting managers to ensure that the hours reported matched the hours a contractor was scheduled to be providing services. (Id. ) St. Clair also contends that Fannie Mae played no role in time reporting or wage processing for independent contractors beyond verifying contractors' Fieldglass reports. (Id. ¶ 7.) Specifically, St. Clair asserts that the Professional Services Agreements ("PSA") entered into by Fannie Mae and the staffing vendors expressly provided that the vendors, and not Fannie Mae, had sole responsibility for paying contract underwriters' wages and for complying with FLSA provisions.⁵ (Id. ¶¶ 11-12.)

Defendant Open Systems responds by offering the declaration of Joseph Bernetich, Open Systems' VP of Operations....