Court Opinion

ID: 810839
Source: CourtListenerOpinion
Date Created: 2012-10-25 14:52:25+00
Date Added: 2024-06-11T09:53:51.513893
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                              Pursuant to Sixth Circuit Rule 206
                                      File Name: 12a0369p.06

                   UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________

                                                           X
                                                            -
 RYAN C. HENRY, et al.,
                                                            -
                               Plaintiffs-Appellants,
              v.                                            -
                                                            -
                                                                 No. 11-2125

                                                            ,
                                                             >
                                                            -
  QUICKEN LOANS, INC.,

                                                            -
                                Defendant-Appellee.
                                                           N

                      Appeal from the United States District Court
                     for the Eastern District of Michigan at Detroit.
               No. 2:04-cv-40346—Stephen J. Murphy III, District Judge.
                                   Argued: October 11, 2012
                            Decided and Filed: October 25, 2012
      Before: SUTTON and GRIFFIN, Circuit Judges; WELLS, District Judge.*

                                      _________________

                                            COUNSEL
ARGUED: Adam W. Hansen, NICHOLS KASTER, PLLP, Minneapolis, Minnesota,
for Appellants. Jeffrey B. Morganroth, MORGANROTH & MORGANROTH, PLLC,
Birmingham, Michigan, for Appellee. ON BRIEF: Adam W. Hansen, Donald H.
Nichols, Paul J. Lukas, Rachhana T. Srey, Robert L. Schug, NICHOLS KASTER, PLLP,
Minneapolis, Minnesota, for Appellants. Jeffrey B. Morganroth, Mayer Morganroth,
MORGANROTH & MORGANROTH, PLLC, Birmingham, Michigan, Robert P. Davis,
MAYER BROWN LLP, Washington, D.C., William D. Sargent, Robert J. Muchnick,
Matthew S. Disbrow, HONIGMAN MILLER SCHWARTZ AND COHN LLP, Detroit,
Michigan, for Appellee.

        *
           The Honorable Lesley Wells, Senior United States District Judge for the Northern District of
Ohio, sitting by designation.

                                                  1
No. 11-2125        Henry, et al. v. Quicken Loans                                  Page 2

                                 _________________

                                       OPINION
                                 _________________

       SUTTON, Circuit Judge.          Mortgage banker Ryan Henry and 445 of his
colleagues sued Quicken Loans, claiming the company failed to pay them overtime
wages from 2003 to 2007, in violation of the Fair Labor Standards Act, 29 U.S.C. § 201,
et seq. Quicken responded that the mortgage bankers fell within an exemption to the
FLSA. After a five-week trial, a jury ruled for Quicken. The mortgage bankers appeal.
We affirm.

                                            I.

       Quicken Loans offers mortgages to customers in all fifty States. Mortgage
bankers like Henry play a prominent role in the lending process, but the parties disagree
over how best to describe that role.

       According to Quicken, mortgage bankers are the “quarterback[s]” of the lending
process. R.722 at 157, 162. In that capacity, they perform a variety of roles: “collecting
and analyzing the relevant information from our Clients concerning their financial
status”; “understanding our Clients’ objectives, goals and needs”; “educating and
advising our Clients on the entire financing process”; and closing loans. Ex. D-4, App.
at 1469–70. Quicken also distinguishes mortgage bankers from “front line” employees,
who assess whether customers have any “interest in pursuing a mortgage loan with
Quicken.” R.716 at 148–49.

       The mortgage bankers by contrast insist they are glorified salesmen. They point
to letters and internal memos that identify the mortgage bankers as a “sales force” and
encourage them to “SELL SELL SELL.” Ex. P-17, App. at 244; Ex. P-3, App. at 157.
According to the mortgage bankers, their daily routines are largely prescribed by a two-
page document that outlines a ten-step process for developing business.
No. 11-2125        Henry, et al. v. Quicken Loans                                 Page 3

       (The record does not disclose whether the parties reversed their positions during
the next negotiation over salaries.)

       After a lengthy trial, a jury found that Quicken’s characterization was the more
accurate of the two and ruled for the company. The plaintiffs filed a renewed motion for
judgment as a matter of law or for a new trial, but the district court denied it. The
mortgage bankers appeal the district court’s rejection of their post-trial motion and its
earlier partial summary-judgment ruling in favor of Quicken.

                                           II.

       The FLSA lays out a general rule that employees must be compensated one and
one-half times their regular hourly pay for each hour worked in excess of forty hours per
week. 29 U.S.C. § 207(a)(2). It then includes several exemptions, one of which covers
employees:

       (1) Compensated . . . at a rate of not less than $455 per week . . . ;

       (2) Whose primary duty is the performance of office or non-manual work
       directly related to the management or general business operations of the
       employer or the employer’s customers; and

       (3) Whose primary duty includes the exercise of discretion and
       independent judgment with respect to matters of significance.

29 C.F.R. § 541.200(a); see also 29 U.S.C. § 213(a).

       The parties agree that the mortgage bankers’ salaries satisfy the compensation
prong of the administrative exemption.           They disagree over application of the
management-related prong and the discretion-and-independent-judgment prong. The
jury sided with Quicken on the last two questions.

       We must respect the jury’s verdict unless “no reasonable juror could have found”
for Quicken. Lowery v. Jefferson Cnty. Bd. of Educ., 586 F.3d 427, 432 (6th Cir. 2009).
“A court may grant judgment as a matter of law only when there is a complete absence
of fact to support the verdict” and “may grant a new trial only when a jury has reached
No. 11-2125        Henry, et al. v. Quicken Loans                                  Page 4

a seriously erroneous result.” Id. (internal quotation marks omitted). Ample evidence
supports the jury’s verdict.

       The management-related prong. To satisfy this requirement, the employee’s
“primary duty” must involve “work directly related to the management or general
business operations” of the company or its customers. 29 C.F.R. § 541.200(a)(2). In this
setting, “‘[p]rimary duty’ does not mean the most time-consuming duty; it instead
connotes the ‘principal’ or ‘chief’—meaning the most important—duty performed by
the employee.” Thomas v. Speedway SuperAmerica, LLC, 506 F.3d 496, 504 (6th Cir.
2007). Nor do labels or titles by themselves answer the question. Moving from the
general to the specific, the U.S. Department of Labor offers the following guidance for
determining whether a financial-services employee fits within the exemption:

       Employees in the financial services industry generally meet the duties
       requirements for the administrative exemption if their duties include
       work such as collecting and analyzing information regarding the
       customer’s income, assets, investments or debts; determining which
       financial products best meet the customer’s needs and financial
       circumstances; advising the customer regarding the advantages and
       disadvantages of different financial products; and marketing, servicing,
       or promoting the employer’s financial products. However, an employee
       whose primary duty is selling financial products does not qualify for the
       administrative exemption.

29 C.F.R. § 541.203(b).

       The question is whether the evidence supported the jury’s finding that the first
sentence of this statement more aptly described the mortgage bankers’ “primary duty”
than the second. It did. None of the forty witnesses who testified at trial seemed to
contest the fact that mortgage bankers perform every one of the tasks listed in the first
sentence of § 541.203(b). The parties’ witnesses diverged, however, as to the issue
presented by the last sentence of § 541.203(b): whether the mortgage bankers’ primary
duty is selling financial products. The jury acted well within its bounds in deciding that
it is not given the competing evidence on this point.
No. 11-2125        Henry, et al. v. Quicken Loans                                   Page 5

       Quicken put on nine witnesses who testified about their job responsibilities. Of
these nine witnesses, at least four adamantly opposed the notion that their primary duty
was “selling financial products.” See, e.g., R.733 at 196; R.734 at 33–34, 141, 152;
R.735 at 34, 190, 198–99. The others were not asked similar point-blank questions
about their primary duties, but they all resisted the notion that their job could be boiled
down to that of a salesperson. Counsel for Quicken also questioned several of the
plaintiffs about their resumes, pointing out that the documents described responsibilities
ranging far beyond sales. Plaintiff Krista Quinn explained that she “[p]repare[d] and
implement[ed] strategies for clients to ach[ie]ve their financial goals and manage their
mortgage more effectively,” App. at 2006, and acknowledged she would have listed
sales on her resume had it been her primary duty. The jury observed each of these
witnesses and, after assessing each witness’s credibility, sided with Quicken. The
evidence permits that choice.

       The discretion-and-independent-judgment prong.             To satisfy the third
requirement, Quicken had to show that the mortgage bankers’ “primary duty includes
the exercise of discretion and independent judgment with respect to matters of
significance.” 29 C.F.R. § 541.200(a)(3). Numerous witnesses professed that they
exercised discretion and independent judgment on the job, including some of the
plaintiffs’ own witnesses. Ryan Henry, the lead plaintiff, acknowledged that there were
“plenty of things” that required him to exercise discretion and judgment, including
“assist[ing] clients in selecting the proper mortgage loan.” R.721 at 155–56. Victor
You, a mortgage banker who has worked at Quicken since 2001, explained that he relied
on his own judgment in making recommendations to clients about the products that
would fit their needs and that “pick[ing] the actual loan for [a] client” was “all up to
[him].” R.734 at 143–44.

       The mortgage bankers point to Quicken’s ten-step guidelines for mortgage
lending and the supervisory checks Quicken had in place as evidence that their discretion
was circumscribed. But, as we have held before, such factors are not dispositive.
See, e.g., Thomas, 506 F.3d at 504 (concluding that “active supervision . . . do[es] not
No. 11-2125         Henry, et al. v. Quicken Loans                                    Page 6

eliminate . . . day-to-day discretion”); Renfro v. Ind. Mich. Power Co. (Renfro II),
497 F.3d 573, 577 (6th Cir. 2007) (concluding that “[l]ooking to various source materials
for . . . technical information . . . does not detract from the import of the discretion and
independent judgment exercised”); Renfro v. Ind. Mich. Power Co. (Renfro I), 370 F.3d
512, 519 (6th Cir. 2004) (concluding that “the heavily-regulated nature” of an
employee’s primary job duty did not “prohibit[] the[] exercise of discretion and
independent judgment”). That Quicken used various methods to channel the mortgage
bankers’ discretion “does not eliminate the existence of that discretion.” Renfro II,
497 F.3d at 577.

        According to the regulations, “discretion and independent judgment” mean the
“comparison and evaluation of possible courses of conduct, and acting or making a
decision after the various possibilities have been considered.” 29 C.F.R. § 541.202(a).
The jury concluded—after listening to forty witnesses and five weeks of testimony—that
the mortgage bankers’ interactions with customers fit this description. That is a
reasonable finding of fact, leaving us no basis for disturbing it.

        It is true, as plaintiffs argue, that this circuit and other circuits have resolved
many administrative-exemption cases as a matter of law. But one premise of those
decisions was the absence of a material fact dispute. See, e.g., Thomas, 506 F.3d at 509;
Renfro II, 497 F.3d at 577–78. The same is not true here. The mortgage bankers and
Quicken presented conflicting evidence in the form of documents and testimony about
the bankers’ primary job responsibilities. On this record, “it must be left to a trier of fact
to weigh the credibility” of the parties’ contradictory “characterization[s] of [the
mortgage bankers’] day-to-day duties.” Schaefer v. Ind. Mich. Power Co., 358 F.3d 394,
407 (6th Cir. 2004) (holding, in a case similar to this one, that the management and
discretion-and-independent-judgment prongs should be weighed by a reasonable trier
of fact); see also Maestas v. Day & Zimmerman, LLC, 664 F.3d 822, 829 (10th Cir.
2012) (concluding that “the primary duty determination is a factual one,” suitable for a
factfinder); Chao v. Double JJ Resort Ranch, 375 F.3d 393, 395–96 (6th Cir. 2004)
(“Whether employees are within an exemption from the provisions of the [FLSA] is
No. 11-2125        Henry, et al. v. Quicken Loans                                   Page 7

primarily a question of fact.”). It may be true that courts can resolve many of these cases
as a matter of law. This simply is not one of them.

       The mortgage bankers separately argue that the jury’s application of the
administrative exemption involved a question of law, one to which we must give fresh,
not clear-error, review. Quicken responds that the mortgage bankers forfeited this
argument by failing to raise it below. That may be true. Either way, it makes no
difference: This case implicated several relevant fact disputes—namely, what the
Quicken mortgage bankers did from day to day and whether those activities involved
management-like responsibilities, discretion and independent judgment. All of these fact
disputes fall within the jury’s domain. No doubt the jury instructions required the proper
legal framing of these factfindings. But the mortgage brokers do not challenge those
instructions.

       The mortgage bankers also invoke several opinion letters from the Department
of Labor and Casas v. Conseco Finance Corp., No. Civ. 00-1512, 2002 WL 507059 (D.
Minn. Mar. 31, 2002). But the letters and Casas do not preclude juries from determining
whether certain types of employees, including employees at other companies working
under different conditions, are exempt from the FLSA. They simply apply the same
inquiry to distinct scenarios, in some instances through non-binding opinion letters, see
Myers v. Copper Cellar Corp., 192 F.3d 546, 554 (6th Cir. 1999), and in one instance
through a non-binding, un-appealed district court summary-judgment decision. None
of these sources speaks to the parties’ dispute in this instance over whether Quicken’s
mortgage bankers were eligible for the exemption. The same three-pronged test outlined
in § 541.200(a) applies to all of these settings, which in some instances will allow a jury
trial and in other instances will not and which in some instances will lead to advice from
the Department of Labor that the employees are exempt and in other instances will not.
These letters and Casas no more prove that this jury verdict was flawed as a matter of
law than this jury verdict proves that the letters and Casas were wrong as a matter of
law.
No. 11-2125        Henry, et al. v. Quicken Loans                            Page 8

       Because we hold that the jury verdict in favor of Quicken must stand, we need
not consider whether the district court properly granted Quicken’s partial summary-
judgment motion on its good-faith and lack-of-willfulness defenses. See Renfro II,
497 F.3d at 578.

                                          III.

       For these reasons, we affirm.