The founder of Quicken Loans was exuberant as his company won a huge victory in a federal lawsuit filed by former employees. He called on other innocent defendants not to settle and described the law firm that filed the case in less-less-than flattering terms. The decision, however, doesn’t necessarily mean that other lenders are off the hook.
The jury in the case, filed in U.S. District Court for the Eastern District of Michigan, was charged with deciding whether former employees should be paid overtime.
The jury decided in favor of Quicken.
“After seven years of litigation, Quicken Loans Inc. was vindicated today by a U.S. Federal Court jury who found the company fully complied with all labor laws in its loan officer compensation plan,” a statement Thursday from the Detroit-based company said. “The jury unanimously rejected all claims that the plaintiffs were entitled to receive overtime compensation in addition to the salaries and commissions they were paid.“
Quicken claims that Minneapolis-based Nichols Kaster, which filed the lawsuit on behalf of the plaintiffs, unsuccessfully attempted to apply a 1930s wage law.
“I’m still shaking,” Quicken founder and chairman Dan Gilbert said in a press conference where he praised jurors and the judge. “The American justice system — it does work, it does work.”
The press conference seemed more like an Oscar victory speech than a press conference — with Gilbert and other executives congratulating their legal counsel and each other.
He called for all companies not to settle with similar “predatory law firms.”
Gilbert added, “Look beyond short-term and quarterly profits and fight for what’s right.”
The mogul, who owns the Cleveland Cavaliers, said the decision is a victory for all companies, all employees and for all people who have been sued by the law firm.
But the victory does not necessarily apply to other cases, according to Patton Boggs LLP Partner Douglas B. Mishkin.
“While this decision is welcome news for the mortgage banking industry, it’s important not to overstate what it means,” Mishkin said in a statement to MortgageDaily.com. “A jury verdict is a decision based on a specific set of facts in a specific case.”
Mishkin explained that this jury found that these Quicken employees performed tasks that qualified them as exempt.
“It doesn’t mean that all employees with similar job titles or job descriptions necessarily will be exempt under the FLSA,” the attorney added. “In determining whether an employee is exempt, it will always boil down to the particular facts of what that employee actually does, not simply the person’s job title or job description.”
Gilbert said that the former employees were duped into joining the lawsuit by the law firm. He noted that it was a case of “legal extortion,” and said Quicken’s defense was never about money — as it probably spent more in legal fees on such litigation than settlements would have cost.
Gilbert belittled the plaintiff’s attorneys.
“It’s just a shame because you see some of their lawyers, they’re some of these hard-working good people,” he said. “You feel bad for the younger ones … why don’t you do something productive with your life, produce things … Produce something for America, produce jobs, services, products instead of trying to be a partner.”
As for the former employees named as plaintiffs, Gilbert spoke highly of them and touted the company’s six-year run on FORTUNE Magazine’s list of the 100 Best Companies to Work for in America.
