Lewis v. Huntington Nat'l Bank

• Decision Date: 12 March 2012
• Docket Number: Case No. C2–11–CV–0058.
• Citation: 838 F.Supp.2d 703
• Parties: Tom LEWIS, et al., Plaintiffs, v. The HUNTINGTON NATIONAL BANK, Defendant.
• Court: U.S. District Court — Southern District of Ohio

838 F.Supp.2d 703

Tom LEWIS, et al., Plaintiffs,

v.The HUNTINGTON NATIONAL BANK, Defendant.

Case No. C2–11–CV–0058.

United States District Court,

S.D. Ohio,

Eastern Division.

March 12, 2012.

Robert E. DeRose, II, Jenna A. Wagner, Katherine A. Stone, Robert Karl Handelman, Barkan Meizlish Handelman Goodin, DeRose Wentz, LLP, Jami S. Oliver, Columbus, OH, for Plaintiffs.

Andrew J. Voss, Littler Mendelson PC, Minneapolis, MN, James M.L. Ferber, Natalie M. McLaughlin, Tracy Stott Pyles, Littler Mendelson PC, Columbus, OH, for Defendant.

OPINION & ORDER

ALGENON L. MARBLEY, District Judge.

I. INTRODUCTION

This matter is before the Court on “Defendant's Motion for Partial Summary Judgment and Memorandum in Opposition to Plaintiffs' Motion for Conditional Certification, Expedited Discovery and Court Supervised Notice to Potential Opt–In Plaintiffs Pursuant to 29 U.S.C. 216(B).” (Doc. 36.) This Court ruled on “Plaintiffs' Motion for Conditional Class Certification, Expedited Discovery and Court–Supervised Notice to Potential Opt–In Plaintiffs Pursuant to 29 U.S.C. § 216(b),” (Doc. 30), in an Opinion and Order filed on May 23, 2011, 789 F.Supp.2d 863 (S.D.Ohio 2011) (Doc. 45). The scope of this Opinion and Order, therefore, is limited and addresses only Defendant's Motion for Partial Summary Judgment. The Court heard oral argument from the parties on January 25, 2012. For the reasons that follow, Defendant's Motion for Partial Summary Judgment is DENIED.

II. BACKGROUND

A. The Lawsuit

1. Factual History¹

Plaintiffs are current or former Mortgage Loan Officers (“MLOs”) employed by Defendant The Huntington National Bank (“Huntington” or “Defendant”) during the time period from January 2008 to the present.² Huntington is a regional bank headquartered in Columbus, Ohio. Huntington's banking activities include marketing and selling mortgage loan products in a number of states. As MLOs, Plaintiffs sell Huntington's residential mortgage products.

The majority of MLOs who are Plaintiffs in this lawsuit work in-house at Huntington. A MLO at Huntington is required to have a General Education Development (GED) or high school education, but does not have to complete any pre-certification or in-service training prior to beginning work. According to deposition testimony and declarations obtained from various Huntington employees who are or were employed as MLOs, or supervise or work with MLOs, the typical duties of an MLO include talking with customers, identifying loan products for those customers, and entering information into a computer program which helps the MLO determine whether a particular customer pre-qualifies or qualifies for a particular loan. The computer program also directs the MLO to additional documentation that must be collected to substantiate the loan. A number of MLOs stated in their declarations that their primary job duty is selling residentialmortgage products. Huntington also encourages MLOs to cross-sell other financial products, including checking and savings accounts, homeowner insurance, and investments, and to refer customers to the appropriate bank department. MLOs are not required to “review, consider, discuss or analyze their consumers' long or short term financial goals or their overall financial circumstances” or “advise a consumer regarding their financial circumstances.” (Doc. 100 at 16–17.)

MLOs do not have underwriting authority or authority provisionally to approve mortgages. Some MLOs stated in their declarations that they do not have the authority to offer lower interest rates on their own, and that they are unable to waive or to discount required applications fees. In the event fees are not collected, MLOs will be subject to having those fees deducted from their compensation. MLOs are evaluated on their ability to produce mortgage sales, productivity, customer satisfaction, and timeliness related to complying with deadlines. If MLOs are unable to meet certain production goals, they will be subject to a Performance Improvement Plan, and can eventually be terminated.

Huntington pays the majority of its MLOs according to its Production Commission and Incentive Compensation Plan (“Plan”). Huntington pays those MLOs who work out of Huntington's corporate offices under its Production Commission and Incentive Compensation Plus Salary Plan (“Salary Plan”). All MLOs are paid under one of these two plans. MLOs paid under the Plan receive only commission earned for loans closed, and MLOs paid under the Salary Plan receive a combination of commission and salary. Huntington pays its MLOs in bimonthly draws that it offsets against the employee's commission earnings, which are paid only after a mortgage closes.

Plaintiffs challenge two of Huntington's wage practices. First, although a number of MLOs have stated in their declarations that they sometimes work more than forty hours per week,³ neither the Plan nor the Salary Plan provide for payment of overtime. From the inception of the MLO position, around the fall of 2004, until the spring of 2011, Huntington has always classified MLOs as administratively exempt from the minimum wage and overtime compensation provisions of the FLSA and has never paid MLOs overtime compensation or required them to document hours worked. Plaintiffs allege that Defendant “unlawfully classified, and continue to unlawfully classify, Plaintiffs ... as exempt from overtime payments under federal and State Law, despite the fact that they are not exempt.” (Second Am. Compl. ¶ 14.) Second, Huntington deducted from the MLOs' bi-monthly draws money that it failed to recoup from mortgage applicants and the cost of the MLOs' personal assistants. These deductions were made without the MLOs' consent and were for losses for which the MLOs were not responsible. Only Plaintiffs' first challenge to Huntington's practices is at issue in Defendant's Motion for Partial Summary Judgment.

2. Procedural History

Plaintiff Tom Lewis filed a three-count complaint on January 18, 2011. (Doc. 1.) Plaintiff then filed two amended complaints, the first adding Plaintiff Matthew Coulter, and the second removing several named defendants and replacing them with Huntington only. (Doc. 15 & 26.) The Second Amended Complaint, filed on March 11, 2011, includes three claims: (1) violations of the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201 et seq., on behalf of all MLOs employed by Huntington since January 18, 2008 who were denied overtime compensation and compensated based under the Plan or the Salary Plan (“Nationwide Class”); (2) violations of the Ohio Minimum Fair Wage Standards Act (“Ohio Wage Act”), Ohio Rev.Code §§ 4111.01, 4111.03, 4111.10, on behalf of all MLOs employed at Huntington's Ohio branches since January 18, 2008 who were denied overtime and compensated under the Plan or the Salary Plan (“Ohio Subclass”); and (3) violations of the Ohio Prompt Pay Act (“Ohio Pay Act”), Ohio Rev.Code § 4113.15, on behalf of the Ohio Subclass. Plaintiffs' FLSA claims are asserted as a collective action pursuant to 29 U.S.C. § 216(b), and the state wage and hour claims are asserted as a class action pursuant to Federal Rule of Civil Procedure 23.

Plaintiffs filed a “Motion for Conditional Class Certification, Expedited Discovery and Court–Supervised Notice to Potential Opt–In Plaintiffs Pursuant to 29 U.S.C. § 216(b)” in March of 2011, (Doc. 30), and Defendant filed its opposition to that motion and Motion for Partial Summary Judgment thereafter, (Doc. 36). Plaintiffs also filed an “Emergency Motion for Protective Order, Cease and Desist Order, the Immediate Granting of Plaintiffs' Motion for Court Supervised Notice, Sanctions, and Corrective Actions” in May of 2011. (Doc. 40.) This Court granted in part and denied in part both of Plaintiffs' motions in its May 23, 2011 Opinion and Order. (Doc. 45.) It authorized Plaintiffs to proceed collectively pursuant to 29 U.S.C. § 216(b),⁴ and to date, 114 Plaintiffs have joined this action. (Doc. 45 & 100.)

In their Motion for Partial Summary Judgment, Defendant moves the Court to: (1) dismiss Plaintiffs' overtime compensation claims under the FLSA and Ohio Wage Act ⁵ with prejudice; (2) grant partial judgment in this matter on behalf of Defendant; and (3) deny Plaintiffs' Motion for Conditional Class Certification, Expedited Discovery and Court–Supervised Notice to Potential Opt–In Plaintiffs Pursuant to 29 U.S.C. § 216(b). Because this Court has already ruled on Plaintiffs' Motion for Conditional Class Certification, Expedited Discovery and Court–Supervised Notice to Potential Opt–In Plaintiffs Pursuant to 29 U.S.C. § 216(b), the scope of this Opinion and Order is limited to Defendant's first and second requests for relief. The U.S. Department of Justice (“DOJ”) filed a Statement of Interest on January 18, 2012, which this Court also has taken under consideration. (Doc. 112.) The Court heard oral argument and this matter is now ripe for decision.

B. Statutory & Regulatory Background

The FLSA generally requires covered employers to pay minimum wages and overtime compensation for hours of work exceeding 40 in a workweek at a rate of one and one-half times an employee's regular rate of pay. 29 U.S.C. §§ 206(a), 207(a)(1). Exempt from the minimum wage and overtime compensation provisions of the FLSA, however, is any employee who is “employed in a bona fide ... administrative ... capacity.” 29 U.S.C. § 213(a)(1). Any employees that qualify as administratively exempt, therefore, are not entitled to overtime compensation under the FLSA.

The Wage and Hour Division (“WHD”) of the Department of Labor (“DOL”) administers and enforces the FLSA, and issues regulations and interpretations of those regulations. In 2004, the WHD revised its regulations governing administratively exempt employees under the FLSA. 29 C.F.R. §§ 541.200–541.204. Moreover, the WHD has issued three Opinion Letters and one Administrator's Interpretation total—two issued prior to the...