SAN FRANCISCO — A federal appeals court recently ruled that mortgage underwriters who work more than 40 hours per week are entitled to overtime pay.
According to the July 5 decision by the U.S. Court of Appeals for the Ninth Circuit, Gina McKeen-Chaplin had brought the lawsuit against Provident Savings Bank F.S.B. on behalf of herself and a class of other mortgage underwriters.
The district court had “held that because the mortgage underwriters’ primary job duty did not relate to their employer bank’s management or general business operations, the administrative employee exemption to the act’s overtime requirements did not apply,” according to the appeals court decision.
The Fair Labor Standards Act narrowly defines administrators as administrative employees who make more than $455 per week and whose primary duties also involve “the exercise of discretion and independent judgment with respect to matters of significance.”
“Mortgage underwriters who implement guidelines designed by corporate management and who must ask permission when deviating from protocol are most accurately considered employees responsible for production, not administrators,” the appeals court said in its decision.
The district court had granted summary judgment to Provident Bank, accepting the defense arguments that bank underwriters did “quality control” work, ruling that the primary aspect that qualified the underwriters for the administrative exemption was their quality control work.
The appeals court, however, disagreed.
“The record does not support this conclusion,” the appeals court said in the decision. "And the district court made no finding as to the legal significance of the quality control functions..."
Therefore, the appellate court reversed the summary judgment decision, noting that summary judgment should be entered in favor of McKeen-Chaplin and the class of underwriters.