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News | Apr 16, 2008

Federal District Court in Philadelphia Allows Overtime Claims by Loan Officers to Proceed to Trial as Collective Action

On April 4, 2008, a federal district judge in Philadelphia, Pennsylvania issued an important opinion in Chabrier v. Wilmington Financial, Inc., 2008 U.S. Dist. LEXIS 27761 (E.D. Pa. Apr. 4, 2008). Chabrier is typical of many FLSA lawsuits that have been filed on behalf of loan officers in recent years. In these lawsuits, the loan officers — who usually are paid on a commission basis – allege that they are entitled to overtime pay, while the mortgage or financial company asserts that the loan officers are exempt from FLSA coverage under either the administrative exemption or the outside salesperson exemption.   In Chabrier, the action was “conditionally certified” as an FLSA collective action and, after notice forms were sent to prospective class members, number loan officers joined the lawsuit as plaintiffs.  Discovery ensued and, at the close of discovery, the company sought to “decertify” the collective action, citing to purported diffences in the individual loan officers’ employment circumstances. The district court disagreed, observing that all of the class members were paid under the same compensation package, shared the same job title, job duties, and job descriptions, and were supervised by the same managers. The court reaffirmed the well-accepted principle that the FLSA does not require workers seeking overtime on a collective casis to share identical circumstances. The court observed: “A showing that there are elements of plaintiffs’ claims that differ, or that a small number of current plaintiffs are excluded, cannot override the similarities present in most plaintiffs’ claims and circumstances.”

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