Today the United States Court of Appeals for the Ninth Circuit ruled that a group of mortgage underwriters represented by Nichols Kaster are non-exempt employees entitled to overtime pay under the federal Fair Labor Standards Act (“FLSA”). The Court determined that Provident Savings Bank, FSB, the underwriters’ employer, could not show that the underwriters fit within the administrative exemption of the FLSA, which applies to employees who assist with the running or servicing of the business. Instead, the Court held that underwriters’ duties “go to the heart of Provident’s marketplace offerings,” which makes them non-exempt.
The Ninth Circuit’s decision reverses an earlier ruling in Provident’s favor by the trial court and sends the case back to the trial court with an order to enter judgment in the employees’ favor. Nichols Kaster attorney Matthew C. Helland, who argued the case on appeal, said that the firm was happy with the decision. “The Court properly recognized that these mortgage underwriters are entitled to overtime pay for their long hours of work. In so doing it confirmed long-standing Ninth Circuit precedent that work must relate to a company’s management or general business operations for the administrative exemption to apply. To quote the Court, ‘the question is not whether an employee is essential to the business, but rather whether her primary duty goes to the heart of internal administration—rather than marketplace offerings.’”
The case is McKeen-Chaplin v. Provident Savings Bank, FSB, Ninth Circuit Case Number 15-16758.