Countrywide Settles Massive OT Lawsuit

Countrywide Home Loans has agreed to pay $30 million to affected employees of the lender at its Pasadena and Rosemead call centers from February 14, 1998, through December 31, 2004.

The plaintiffs contend that “Countrywide violated various California state and federal laws by failing to pay Account Executives overtime for working more than 40 hours per week,” court documents reveal.

The lawsuit, which has about 400 affected class members, tops all prior mortgage industry wage and hour settlements with its $30 million outcome, averaging about $50,000 per qualified employee, according to the plaintiff’s Oakland, Calif., attorney Linda Dardarian of Goldstein, Demchak, Baller, Borgen & Dardarian.

Qualified members have until May 28th to object the terms of the settlement, Dardarian told MortgageDaily.com.

“They have the option to either file their portion of the claim or to opt out of the suit,” Dardarian said, adding that some of the members may decide to pursue the claim on their own.

According to the class action notice, the court has tentatively approved a $7 million payment to Dardarian’s firm as “reasonable compensation to Class Counsel for their work in this matter.”

“We are very, very pleased,” Dardarian said regarding the settlement, which is scheduled to be final on June 27.

Calabasas, Calif.-based Countrywide has agreed to the settlement but maintains that it has not broken the law.

“Countrywide’s consistent policy has been to classify employees as required by law,” the lender noted in an emailed statement to MortgageDaily.com. “While the company continues to believe that its original classification of account executives was lawful and that it would have been upheld at trial, it decided to settle in order to avoid the expense and uncertainty of litigation. This settlement permits both its Account Executives and managers to focus on their primary concern, providing the best service to the consumer.”

Other concessions agreed to by Countrywide include reclassifying its Rosemead call center employees as “non-exempt” employees, “and thereafter pay them overtime for overtime hours worked, cease taking wage deductions for their production errors and deficiencies, provide them with off-duty meal periods after every five hours worked, and keep and provide them with records of hours they worked,” according to the class action notification.

Countrywide, with production of $91.5 billion, was the largest originator of mortgage loans during the first quarter, according to MortgageDaily.com data.