On the heels of its victory in a seven-year-old federal lawsuit filed by its former loan officers, Quicken Loans Inc. suffered a blow in another federal lawsuit filed by a former secretary who claims the company asked her to lie on her timesheet.
In March, a federal jury decided in favor of the Detroit-based company in a case where former originators were seeking alleged unpaid overtime. The law firm representing the plaintiffs in that case, Nichols Kaster PLLP, vowed to “seek a new trial in this case and aggressively pursue the other three cases currently pending against Quicken on behalf of loan officers in this same court.”
But the news wasn’t so good in another lawsuit being fought by the retail originator in the same court.
Tiyanna Knight was a secretary for Quicken’s sales unit between 2007 and 2010, according to a putative class-action complaint filed in U.S. District Court for the Eastern District of Michigan on Oct. 15, 2010. She claims that from 2007 to 2009, Quicken asked her and employees like her to lie on their timesheets in order to avoid overtime pay.
E-mail messages were presented as evidence of the allegations.
Quicken, according to court documents, “wrongfully and illegally withheld due compensation” because it “began experiencing financial difficulties in early 2007.”
Employees were allegedly told that the unpaid overtime would be credited to compensatory time that they could use for personal business during work hours — though “team leaders and other Quicken management strongly discouraged the use of compensatory time, and directly or indirectly intimidated and coerced plaintiff and putative class members into not using compensatory time.”
The plaintiff claims that employees who used the compensatory were made to feel like lazy, selfish outcasts.
“Plaintiff and putative class members complain that defendant knowingly engaged in a pattern and practice of unlawful conduct which resulted in denying them owed wages,” the complaint states. “Specifically, plaintiff and putative class members were and are employees who are entitled to minimum wage, overtime compensation, documentation of compensation time, and prompt payment of amounts that the employer owes an employee when the employee works, quits, or is terminated and other compensation and working conditions that are prescribed by law.”
Quicken, which at last count employed 4,000 people, is accused of violating the Fair Labor Standards Act.
Quicken filed a motion to dismiss the lawsuit on Dec. 14, claiming that the plaintiff — who was discharged from Chapter 7 bankruptcy in July 2010 — failed to disclose a potential overtime claim against Quicken in the bankruptcy Schedule B. As a result, according to Quicken’s filings, she is judicially estopped from bringing such a claim.
But U.S. District Judge Stephen J. Murphy III disagreed and denied Quicken’s motion.
“Knight likely did not understand that the allegations she has now put forward against Quicken constituted a federal cause of action until she had a discussion with an attorney who alerted her to its potential illegality,” the judge wrote in the decision. “Clock-fixing is not as selfrevelatory a cause of action as, for instance, racial discrimination in the workplace, or denial of overtime in a context where the employee understood they were owed overtime and was refused it after demanding payment.”
The judge noted that the bankruptcy was filed before she learned of a potential overtime claim against Quicken, and she notified the bankruptcy court once she was made aware of the discrepancy.
“Judicial estoppel works on a simple premise: courts do not have to entertain the claims of plaintiffs who are manipulating the judicial system for their own advantage,” the judge concluded. “In the current procedural posture of this case, there is no basis to believe that Knight engaged in such behavior, and it would be inequitable for the court to preclude her claims.
“Accordingly, it will deny Quicken’s motion.”
In a statement, Quicken claims that is has always paid team members as required by all laws and encourages employees to bring up such issues to their supervisors. The company noted, however, that Knight never brought up the alleged unpaid overtime to her managers until after she was terminated.
“Quicken Loans categorically denies this claim has any merit whatsoever,” the statement said. “Unfortunately, we fear that this case is another example of the reckless permissiveness of our current day legal system.”
The statement went on to blast law firms who pressure targets like Quicken with baseless claims by using the fear of legal expense, time and resources needed to fight such a case.
Knight and her prospective co-plaintiffs want to collect unpaid wages, liquidated damages and attorney fees. They are also asking “that they and future workers will not be subjected by the defendant to such illegal conduct in the future.”
Tiyanna Knight, individually and on behalf of all similarly situated people, Plaintiff, vs. Quicken Loans Inc., a Michigan Corporation, Defendant.
Case No. 2:10-cv-14147-SJM-MJH, Oct. 15, 2010 (U.S. District Court for the Eastern District of Michigan).