Former, Current CA Employees Sue WaMu over Job Expenses

In the lawsuit, LARRY EVANS, et al. Vs. Washington Mutual Bank, et al., the plaintiffs — one current and one former employee — accuse WaMu of violating California Labor Code 2802, “Failure to Reimburse Employee Expenses.”

“The statute requires that employers doing business in the state of California reimburse their employees for all reasonable, out-of-pocket, expenses that are incurred in the performance of their job duties,” Michael J. Procopio, the plaintffs’ attorney, told MortgageDaily.com in a telephone interview from his office in Santa Ana, Calif.

Procopio said he hopes to obtain class action certification for a group in excess of 2,500 that includes wholesale and retail mortgage originators employed for WaMu in California from October 1998 until the present.

Washington Mutual has not reimbursed the plaintiffs for sales-related expenses, Procopio said, even though the expenses are necessary in the performance of their jobs. Expenses claimed include mileage and travel related costs; cell phone usage; outside entertainment; and home telephone usage. However, Procopio did note that these expenses were not previously approved by WaMu.

“While we won’t comment on the specifics of Mr. Evans’ lawsuit, Washington Mutual has a long-standing practice of reimbursing its California employees for reasonable business expenses, in compliance with California law,” WaMu spokeswoman Libby Hutchinson told MortgageDaily.com in an email statement. “Mr. Evans has been fully reimbursed (for) all of his reasonable business expenses.”

Procopio indicated that he thinks Seattle-based WaMu just didn’t understand California labor laws, and was trying to treat W-2 employees as independent contractors in this regard.

Washington Mutual pays the plaintiffs a tiered per unit commission over and above regular loan commissions, “and this is the focus of Washington Mutual’s parent defense thus far,” Procopio said. “Washington Mutual is saying that the per unit commissions that are earned by these employees each pay period were intended to reimburse these employees for their business expenses.”

But Procopio notes that WaMu’s compensation agreements did not say this, and that “the law requires a dollar for dollar for these types of expenses.” He said that after the lawsuit was filed, WaMu changed its compensation agreements to reflect a statement that says the per unit commissions that the employee receives are intended to be a reimbursement for business expenses.

The Orange County case, which Procopio said has been aggressively litigated by WaMu, is reportedly set for a class certification hearing on January 15.