United States District Court, D. Kansas
CHRIS JANCICH, On behalf of himself and all other persons similarly situated, Plaintiff,
STONEGATE MORTGAGE CORPORATION, Defendant.
MEMORANDUM AND ORDER
ERIC F. MELGREN, District Judge.
Plaintiff Chris Jancich, on behalf of himself and others similarly situated, filed this case against Defendant Stonegate Mortgage Corporation for alleged violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. The Court granted conditional certification of the class on February 6, 2012. As of this date, there are twelve former loan officers who have opted into the collective class. Discovery has closed, and the matter is before the Court on Defendant's Motion to Decertify (Doc. 98). Because the Court finds that Plaintiffs are similarly situated, the Court denies Defendant's motion.
I. Factual and Procedural Background
Plaintiff Chris Jancich filed this collective action on November 3, 2011, seeking unpaid minimum wages and overtime wages on behalf of himself and other similarly situated loan officers employed by Defendant Stonegate Mortgage Corporation ("Stonegate"). Stonegate is an Indiana corporation, with its headquarters in Indianapolis, and was founded in 2005. It acquires loans and retains the mortgage servicing rights on a retail, wholesale, and correspondent basis through a network of retail branches and approved third-party originators. Stonegate has retail branches in several states, and its offices in Indiana, Kansas, and Ohio are at issue in this class action.
Generally, a Stonegate loan officer's job duties included identifying prospective loan applicants, assessing whether those applicants would qualify for a loan product, pulling the necessary information for loan applications, compiling the essential loan forms, and submitting the loan application for processing and underwriting. Most of the Plaintiffs worked out of one of Defendant's offices, but several Plaintiffs worked out of a satellite office, or out of their home as a business office. Plaintiffs performed some marketing activities, and the amount of hours each Plaintiff performed varied.
Until February 15, 2009, loan officers were paid commissions based on 50% to 65% of the gross revenue of a funded loan, plus $425 per funded loan, less a $300 branch fee per funded loan ("the Revenue Percentage Commission Plan"). From February 15, 2009, through October 1, 2010, loan officers were paid commissions based on a basis points system ("the Basis Points Commission Plan"). From October 1, 2010, through the present, loan officers are paid a twice-monthly draw of $650 to $750, as well as commissions based on basis points earned per funded loan ("the Draw/Commission Plan"). Several of the opt-in Plaintiffs negotiated variations on these plans for the first few months of their employment.
Prior to October 1, 2010, Stonegate treated its loan officers as exempt, relying on the United States Department of Labor ("DOL") Administrator's Opinion Letters FLSA2006-11 and FLSA2006-31. Thus, Stonegate did not require loan officers to record their hours worked. As of October 1, 2010, Stonegate began treating its loan officers as non-exempt because of the DOL's Administrator's Interpretation No. 2010-1. Stonegate directed its employees to record time worked in time-tracking software, Timeforce. Several opt-in Plaintiffs testified that they recorded their overtime hours and were paid for those overtime hours.
Of the thirteen Plaintiffs, Defendant has deposed eight of them. All deposed Plaintiffs testified that Defendant's management representatives expressly instructed them to record only forty hours of work per week, despite the actual number of hours worked. All deposed Plaintiffs testified that they worked in excess of forty hours per week.
On February 6, 2012, this Court certified a collective class, with the time period running from February 9, 2009, forward. Discovery has closed. Now, Defendant seeks decertification of the collective class asserting that Plaintiffs are not similarly situated.
II. Legal Standard
When considering a motion to decertify a collective class, the "overriding question" is whether the plaintiff and the opt-in plaintiffs are similarly-situated for purposes of § 216(b). The standard at this second stage is stricter than the standard utilized at the certification, or notice, stage. At the decertification stage, the court reviews several factors, including (1) different factual and employment settings of the individual plaintiffs, (2) individualized defenses available to the defendant with regard to each plaintiff, and (3) fairness and procedural considerations. The Court will consider each factor.
1. Factual Disparities
Defendant contends that there are disparate factual settings because (1) different pay plans applied to each Plaintiff, (2) not all Plaintiffs tracked their hours worked, (3) Plaintiffs' job duties varied, and (4) Plaintiffs worked in different offices under different supervisors. Plaintiffs argue that there are substantial common facts with only small distinctions between each Plaintiff. In ...