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D.Md.: For Application of Outside Sales Exemption, Any Fixed Site Used By Employee To Solicit Sales Is Considered Employer’s Place of Business
Speert v. Proficio Mortgage Ventures, LLC
This case was before the court on the plaintiffs’ motion for partial summary judgment. The case concerned a group of mortgage loan originators who claimed they were wrongly denied minimum wages and overtime compensation by defendants. As discussed here, plaintiffs, who were loan originators employed by defendants, moved for a finding that the “outside sales exemption” was inapplicable to them. It appears undisputed that the plaintiffs worked in a satellite or branch office, rather than defendants’ main office or headquarters. Despite this fact, the court awarded plaintiffs summary judgment on this issue.
Citing the relevant CFR regs, the court explained:
“The only point otherwise argued by Defendants is that Plaintiffs concede they never performed any work at Proficio’s licensed Owings Mills, Maryland, office and, therefore, Plaintiffs have conceded they were “customarily and regularly engaged away from their employer’s place of business,” within the meaning of the “outside sales” exemption of 29 C.F.R. § 541.500. (Defs.’ Opp. 10.) Defendants’ interpretation of the exemption is contrary to the explanatory language of 29 C.F.R. § 541.502, which states, “[A]ny fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business, even though the employer is not in any formal sense the owner or tenant of the property.” Given that language, it matters not whether Plaintiffs worked in Proficio’s “licensed” location or in another location. Defendants have not sustained their burden of proving by clear and convincing evidence the applicability of the “outside sales” exemption to Plaintiffs. In fact, no genuine dispute of material fact exists on the applicability of this exemption. It does not apply to the Plaintiffs.”
Although the law is fairly clear in this area, this case serves as a reminder that employees need not be working out of the employer’s headquarter’s or “home” office, in order to be considered working from an inside sales location within the meaning of the FLSA.
Click Speert v. Proficio Mortgage Ventures, LLC to read the entire Memorandum Opinion.
Administrator’s Interpretation No. 2010-1
The Wage and Hour Division, under the current Administration, has issued its first Administrative Interpretation Letter. The introductory text of the Letter is below:
“Based on the Wage and Hour Division’s significant enforcement experience in the application of the administrative exemption, a careful analysis of the applicable statutory and regulatory provisions and a thorough review of the case law that has continued to develop on the exemption, the Administrator is issuing this interpretation to provide needed guidance on this important and frequently litigated area of the law. Based on the following analysis it is the Administrator’s interpretation that employees who perform the typical job duties of a mortgage loan officer, as described below, do not qualify as bona fide administrative employees exempt under section 13(a)(1) of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1).
Typical Job Duties of Mortgage Loan Officers
The financial services industry assigns a variety of job titles to employees who perform the typical job duties of a mortgage loan officer. Those job titles include mortgage loan representative, mortgage loan consultant, and mortgage loan originator. For purposes of this interpretation the job title of mortgage loan officer will be used. However, as the regulations make clear, a job title does not determine whether an employee is exempt. The employee’s actual job duties and compensation determine whether the employee is exempt or nonexempt. 29 C.F.R. § 541.2.
Facts found during Wage and Hour Division investigations and the facts set out in the case law establish that the following are typical mortgage loan officer job duties: Mortgage loan officers receive internal leads and contact potential customers or receive contacts from customers generated by direct mail or other marketing activity. Mortgage loan officers collect required financial information from customers they contact or who contact them, including information about income, employment history, assets, investments, home ownership, debts, credit history, prior bankruptcies, judgments, and liens. They also run credit reports. Mortgage loan officers enter the collected financial information into a computer program that identifies which loan products may be offered to customers based on the financial information provided. They then assess the loan products identified and discuss with the customers the terms and conditions of particular loans, trying to match the customers’ needs with one of the company’s loan products. Mortgage loan officers also compile customer documents for forwarding to an underwriter or loan processor, and may finalize documents for closings. See, e.g., Yanni v. Red Brick Mortgage, 2008 WL 4619772, at *1 (S.D. Ohio 2008); Pontius v. Delta Financial Corp., 2007 WL 1496692, at *2 (W.D. Pa. 2007); Geer v. Challenge Financial Investors Corp., 2007 WL 2010957 (D. Kan. 2007), at *2; Chao v. First National Lending Corp., 516 F. Supp. 2d 895, 904 (N.D. Ohio 2006), aff’d, 249 Fed.App. 441 (6th Cir. 2007); Epps v. Oak Street Mortgage LLC, 2006 WL 1460273, at *4 (M.D. Fla. 2006); Rogers v. Savings First Mortgage, LLC, 362 F. Supp. 2d 624, 627 (D. Md. 2005); Casas v. Conseco Finance Corp., 2002 WL 507059, at *1 (D. Minn. 2002).”
To read the entire Letter click here.