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SHRM Newsletter- Court Finds Mortgage Loan Officers to be Exempt
Posted on Feb. 24, 2014

This is Utah SHRM Legal-mail no. 2014-3 prepared for Salt Lake SHRM, the Human Resources Association of Central Utah (HRACU), the Northern Utah Human Resources Association (NUHRA), the Color Country Human Resources Association (CCHRA), the Bridgerland Society for Human Resource Management and Utah at-large members of the national Society for Human Resource Management (SHRM).

CONTENTS:

-  COURT FINDS MORTGAGE LOAN OFFICERS TO BE EXEMPT

-  TEMPORARY IMPAIRMENT MAY BE DISABILITY

-  EMPLOYER’S OFFICERS AND AGENTS PERSONALLY LIABLE FOR MISSED PAY?

-  HOLLADAY CITY ENACTS SEXUAL ORIENTATION DISCRIMINATION BAN

-  UTAH LEGISLATIVE UPDATE

COURT FINDS MORTGAGE LOAN OFFICERS TO BE EXEMPT: A federal trial court in Virginia has ruled that the mortgage loan officers employed by the financial institution involved in that case were exempt from the overtime pay and related requirements of the Fair Labor Standards Act (FLSA). The court based its ruling on the outside sales employee exemption from FLSA. According to the United States Department of Labor (DOL), to be an exempt outside salesperson, the employee’s primary duty must be “making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and the employee must be customarily and regularly engaged away from the employer’s place or places of business.” The Virginia court found that the mortgage loan officers involved in that case met these requirements, even though they spent most of their time in the office, by regularly attending outside events, such as open houses, weekly networking events, weekly one-on-one meetings with realtors and monthly home-buying seminars. Before switching these types of employees back to nonexempt status, employers might want to wait and see how the appeals court deals with this case, as well as how the DOL deals with another recent decision that said it did not enact its “loan-officers-are-nonexempt” letter in the right way. Employers who make the switch now, before the law develops a bit further, might be taking on a large litigation risk. There are still plaintiff-side employment lawyers out there looking to sue financial institutions who classify loan officers as exempt. If, on the other hand, an employer decides to make the change now (or in the near future), it would be wise to carefully study the facts in the recent case and model classifications on the approach that particular employer used. The Virginia case name/citation is Cougill v. Prospect Mortgage, LLC, No. 13-1433 (E.D.Va. Feb. 5, 2014).

TEMPORARY IMPAIRMENT MAY BE DISABILITY: A federal appeals court has ruled that a temporary impairment may be a disability under the Americans With Disabilities Act Amendments Act (ADAAA) if the impairment is sufficiently severe to substantially limit a major life activity. The case involved a lawsuit by a plaintiff who was fired within two months after he incurred an injury that left him unable to walk for seven months. The court relied on legislative history showing Congress intended the ADAAA to provide “broad coverage” and “to the maximum extent permitted.”

EMPLOYER’S OFFICERS AND AGENTS PERSONALLY LIABLE FOR MISSED PAY? The Utah Supreme Court is considering whether the officers of a failed company can be held personally liable for the wages left unpaid by that company when it goes out of business. The case involves an interpretation of a Utah statute (this is also common in other states) that makes employers responsible for unpaid wages but also defines employers to mean any agent or officer of the employer. Other state courts have examined similar statues and held that officers and agents are not personally liable for unpaid wages. Mark Tolman, the legal/legislative director for the SHRM Salt Lake Chapter, represents the former officers in the lawsuit. Stay tuned for developments.

HOLLADAY CITY ENACTS SEXUAL ORIENTATION DISCRIMINATION BAN: The city of Holladay has become the 20th city/county in Utah to adopt a local ordinance prohibiting workplace discrimination against employees based on sexual orientation and/or gender identity. The ordinance applies to businesses (with 15 or more employees) operating within the Holladay city limits. The ordinance also provides for an administrative process (a city antidiscrimination board) to receive, consider and remedy (if needed) complaints of job bias. You can read a copy of the full ordinance here:  http://www.cityofholladay.com/img/File/Ordinance%20Anti-Discrimination%20holladay%20final.pdf. The other Utah jurisdictions with similar laws are: Salt Lake City, Salt Lake County, Park City, Summit County, Taylorsville, West Valley City, Marriott–Slaterville, Murray, Midvale, Moab, Grand County, Ogden, Logan, Alta, Harrisville, Springdale, South Salt Lake, Perry City and Washington Terrace. Businesses operating in Holladay (and the other jurisdictions listed above) should note and comply with this new regulation impacting their operations.

UTAH LEGISLATIVE UPDATE: With just three weeks left in the annual session of the Utah Legislature, it is pretty clear that Utah will not raise its minimum wage or adopt a statewide ban on workplace sexual orientation discrimination this year. HB 12 (text found here: http://le.utah.gov/~2014/bills/hbillint/HB0012.pdf ) is now pending before the House Business and Labor Committee. This bill would require any employer who requests a credit score on an employee (for purposes other than extending credit) to also give the employee a written notice within ten days of receiving the credit score. This written notice must provide the name of the consumer reporting agency providing the credit score, the unique name associated with the algorithm used to generate the credit score and the score itself. If the bill passes, employers can be fined id="mce_marker"000 each time they fail to provide the written notice. Also pending before the House is HB 359 (text found here:  http://le.utah.gov/~2014/bills/hbillint/HB0359.pdf ) which would increase the remedies available under Utah law to plaintiffs claiming workplace bias. The bill would allow the recovery of compensatory and punitive damages to the same amount available for federal race bias claims. The bill also would allow for court-litigation of state-based discrimination claims, which now must be litigated exclusively through the administrative process of the Utah Labor Commission. The bill has not yet been assigned to a committee and likely will not pass this year.

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mikeAttorney Michael
Patrick O'Brien

Mike O’Brien is an experienced and accomplished employment attorney, media lawyer and courtroom litigator.  He is active in SHRM and has received the highest possible reviews from rating services like Martindale - Hubbell (AV rating), Chambers USA, Utah Business Legal Elite, Best Lawyers in America, Who’s Who Legal USA, and SuperLawyers.  HR Executive Online has named him as one of America’s most powerful 100 employment lawyers, but keep in mind, this does not mean he is good at moving heavy furniture.

Awards and Recognition

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Chambers 2011 Attorney

Super Lawyers
Michael Patrick O'Brien
 

Best Lawyers In America, “Salt Lake City Best Lawyers Employment Law Lawyer Of The Year,” 2011-2012

Best Lawyers In America, First Amendment Law, Labor And Employment Law, 2005-2012

Chambers USA, Labor & Employment, 2003-2011

Employment Lawyer Of The Year, Utah State Bar, 2001

Human Resources Executive, Nation’s Most Powerful Employment Lawyers In America, 2010

Mountain States Super Lawyers, 2007-2012

Utah Business Magazine, Legal Elite, Labor And Employment, 2006-2012