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Originator OT Issue Isn’t Over

Originator OT Issue Isn’t Over3 former LOs sue WaMu

June 9, 2006

By LISA D. BURDEN
WASHINGTON correspondent for MortgageDaily.com

Washington Mutual Inc. was sued this week in a New York federal court by three former mortgage loan originators for failure to pay overtime and minimum wages. The trio claims the company can’t hide behind a recent overtime ruling.In court documents filed Monday, the former employees allege that the Seattle-based thrift violated the federal Fair Labor Standards Act and labor laws in several states.

Previously employed at locations in New York, California and Illinois, they claim to have worked more than 40 hours per week with no overtime pay and, when loans did not close, without the legally required minimum wage. The loan originators, all of whom have since left the company, claim WaMu has violated state and federal labor law for the past three years.

The loan officers, who worked at locations in New York, California and Illinois, claim they worked more than 40 hours per week with no overtime pay and, when loans did not close, did not receive the legally required minimum wage. The loan originators, all of whom have since left the company, claim state and federal labor laws were violated for the past three years.

Their attorney, Jack Raisner of Outten & Golden LLP, alleges the workers are not covered under the Department of Labor ruling issued earlier this year which said originators who meet certain outside sales qualifications such as spending most of their time outside the office do not have to be paid overtime or minimum wage. Raisner said the firm looked at the ruling and determined that the workers in the lawsuit qualified as inside sales people, not outside sales people.

“The law does not allow employers to avoid paying overtime compensation to people who handle mortgages and loans on a strictly commission basis,” Raisner said. “Paying them less than minimum wage when their commissions dip is particularly harsh given the long hours these people work.”

The plaintiffs are seeking class action status, commonly called “collective action” status, under the labor act. If granted, current and former WaMu home loan consultants nationwide would be allowed to join the lawsuit.

WaMu, which did not return calls for comment by publication, is the third largest residential mortgage lender in the United States and reportedly employs about 16,000 people in its home loans unit.

Raisner estimated the lawsuit could potentially involve hundreds of current and former employees.

“We allege that the unlawful conduct has been widespread, repeated and consistent,” said attorney Paul J. Lukas, of Minneapolis-based Nichols Kaster & Anderson PLLP, which is also representing the plaintiffs. “We believe that Washington Mutual has willfully committed widespread violations of the FLSA, and that the company knew that these employees and others performed work that required overtime pay and minimum wages.”


Lisa D. Burden is a legal analyst for MortgageDaily.com and holds a law degree from the University of Maryland. She is currently a freelance journalist who previously wrote for Institutional Investor publications and the Baltimore Daily Record.

e-mail Lisa at: burdenlisa@yahoo.com

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