Plaintiffs Want $6.2M Countrywide Overtime Settlement Approved

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Countrywide Financial Corp., owned by Bank of America, has agreed to pay $6.2 million to resolve a class action lawsuit accusing the financial institution of stiffing workers in its subprime mortgage division out of overtime pay.

While the deal was struck in November, plaintiffs in the case motioned for preliminary approval of the class action settlement on Jan. 10, calling it “comprehensive,” “fair” and and “substantially beneficial to the Class.”

The $6.2 million class action settlement will provide up to $1,500 for each of the 4,000-plus Class Members who are allegedly owed unpaid overtime from 2002 to 2004. It was these employees who sought the deal after discovering they had been misclassified as exempt from overtime for years.

Employees Seek Years of Unpaid Overtime

Plaintiffs allege in the overtime lawsuit that they were required to work over five hours in overtime each week for the two-year period between 2002 and 2004. They should have been paid time and a half for these hours, or up to $1,500, according to their class action. The proposed class action settlement also includes $3.15 million in attorney’s fees.

Wage and hour complaints can happen in any industry, particularly the restaurant and retail industry, but it’s clear from Countrywide’s situation that no company is exempt.

Each of the wage and hour victims in this case were account executives who were “expected to work more than 40 hours a week,” but the catch was that they were told they did not qualify for overtime pay. However, in 2005, the California Department of Labor kickstarted an investigation, targeting employees who were red flags for being miscategorized.

Full Spectrum, part of Countrywide, then “re-categorized” these account execs as nonexempt. In an attempt to avoid a wage and hour class action lawsuit, they were offered a “voluntary back pay program” which was denied.

Wage and hour lawsuits aren’t just costly for the companies/defendants but can also mar reputations. It was estimated via Full Spectrum that each executive worked an average of five hours of overtime per week for two years—however, the workers claim that 10 to 15 hours of overtime was more on point.

The plaintiffs also claim that they were “duped” into working basically for free. They say they were led to believe they were exempt, not knowing that Countrywide can’t randomly decide who qualifies for overtime and who doesn’t. They estimate that around 3,500 employees were tricked into accepting this allegedly shady practice.

In May 2013, a California federal judge ruled that damages resulting from the class action lawsuit should be at time and a half—the standard overtime rate, but one that Countrywide initially fought. The company claimed that since the actual hours of overtime worked were different for each person, time and a half wasn’t a fair assessment.

Three particular plaintiffs, Reggie Wallace, Travin Lu’I and Erik Frates, submitted a memorandum in November 2013 in support of the motion for preliminary approval of the proposed settlement agreement. The workers note that “although Plaintiffs remain confident in the strength of their claims, they recognize the uncertainty attendant with class action litigation of this nature.”

The workers also say that the “proposed notice plan ensures fair and reasonable notice to the Class Members. The proposed notice forms, which will be distributed via regular mail and email, if known, to each Class Member, will fairly apprise the Class Members of the proposed settlement terms.”

Joining a wage and hour class action lawsuit is often the fastest way to get results without compromising on the fairness aspect.

“The proposed settlement satisfies, and, in fact, well exceeds the threshold requirements for preliminary approval by the court and falls well within the range of permissible final approval,” the motion reads.

Plaintiffs requested the court grant preliminary approval of the class action settlement, approve the proposed plan of notice and notices to the class, as well as approve the administration of the settlement.

Winning the War

It was plaintiffs Reggie Wallace and Erik Sosa who initially filed the Countrywide overtime class action lawsuit against on Sept. 8, 2005, and they’ve been leading their pack of colleagues ever since.

They filed their first amended class action lawsuit on Jan. 20, 2006 for violation of the UCL, fraud and deceit, and conspiracy. Countrywide then moved the action to Federal Court, but a judge moved it back to State Court on Oct. 27, 2006. On Dec. 1, 2008, the two men followed up with a second amended complaint.

The discovery process has been intense with eight sets of written discovery, more than 30,000 pages of documents produced from Countrywide, written interrogations, an additional 20,000 pages from Countrywide from a similar case, and 27 depositions. After a series of winning small battles, it seems like a big win might be around the corner for the thousands of Countrywide employees who allege they were tricked into working overtime.

Do You Have a Wage & Hour Complaint?

If you feel you weren’t paid fairly for any reason, in any industry, you might qualify for a wage and hour legal claim. Discover more about your potential next steps at the Wage & Hour, Overtime Pay Class Action Lawsuit Investigation today. Submit your information, and an employment lawyer will contact you if you qualify for a free wage and hour claim review.