Countrywide Pays $30 Million in Call Center Suit
Countrywide Financial Corp. here has settled a class-action lawsuit for $30 million filed by call-center employees who were seeking to be compensated for overtime.
According to a copy of the settlement notice on the website of the attorney for those suing Countrywide, the class consists of approximately 400 people who worked in the company's Pasadena, Calif., and Rosemead, Calif., centers.
Countrywide had called the employees "account executives," but a 2003 press release from the law firm of Goldstein, Demchak, Baller, Borgen and Dardarian said the worker's duties included answering incoming telephone calls, inputting information into the company's computer system, informing customers about loan products, and completing and packaging loan paperwork.
A statement from Countrywide said, "Countrywide's consistent policy has been to classify employees as required by law. While the company continues to believe that its original classification of account executives was lawful and that it would have been upheld at trial, it decided to settle in order to avoid the expense and uncertainty of litigation. This settlement permits both its account executives and managers to focus on their primary concern, providing the best service to the consumer."
The settlement notice itself said that Countrywide continues to deny all of the allegations made in the complaint. "There has been no finding of any wrongdoing by Countrywide and Countrywide does not admit to any liability," the notice said.
As part of the settlement, Countrywide agreed to reclassify Rosemead call-center account executives as nonexempt employees. Thus they are now eligible for overtime.
In addition, the company will stop docking the employee's wages for production errors and deficiencies and give them off-duty meal periods after every five hours worked.
The class consists of employees of the two call centers who worked at any time between Feb. 14, 1998 and Dec. 31, 2004.
Since the time when the lawsuit was filed, the Department of Labor has issued revisions to the Fair Labor Standards Act that clarified the activities, which constitute exempt and nonexempt employees.
The rules, according to proponents from the mortgage industry, would make most loan officers exempt from the regulations requiring payment of overtime. These rules went into effect in August 2004.
Laurence Platt of the Washington law firm Kirkpatrick & Lockhart said the new rules ended what had been widespread uncertainty. But, he cautioned, the person's title is not the key point. Rather one has to look at the employee's scope of activities to see if they are exempt.
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