Better Mortgage agrees to settlement in underwriter wage case

Better will pay millions of dollars to hundreds of current and former underwriters to settle a lawsuit over unpaid wages. 

Attorneys for aggrieved employees filed a motion for preliminary approval of the settlement last week, a deal which will cover 211 opt-in plaintiffs. The lender will issue a total of $7.1 million, although that sum includes an already-credited payout, and a designated sum to a California labor office. 

Bloomberg Law first reported the settlement. A federal judge has yet to respond to the motion in a California federal court. 

Former underwriter Lorenzo Dominguez sued his former employer in September 2020 for alleged unpaid overtime wages. The accusations, similar to wage suits by other mortgage professionals, asserted Better did not pay employees for overtime or meal periods. Dominguez claimed the nonpayment occurred while he was a remote worker in the immediate wake of the coronavirus pandemic. 

The case has undergone prolonged litigation, including a bout in a federal appellate court that ended with a ruling in the employees' favor. In agreeing to the resolution, Better denies the wage allegations and denies any fault or wrongdoing, according to last week's filings. 

Within the settlement fund, opt-in plaintiffs will receive pro rata payments from a $3.8 million pool. No plaintiff will receive less than $1,000, attorneys wrote. 

Attorneys for both sides declined to comment Monday, while a spokesperson for Better said the company doesn't comment on settlements. 

"We remain committed to maintaining a fair and respectful workplace for all employees," the spokesperson said. 

Where the money will go

The lawsuit includes accusations under a California law which allows employees to sue a firm for violations on behalf of the state, similar to the federal False Claims Act.

The two sides spent years litigating the case because Better amended its employee agreements with arbitration provisions soon after Dominguez filed his complaint, attorneys wrote. A federal judge handed Better a few losses throughout the case, including invalidating some of their agreements with underwriters, and denying their move to compel arbitration with workers hired before the provision was included. 

According to the settlement, $485,000 of the sum has already been credited to 97 individuals who signed earlier, separate agreements with Better, so the lender is actually paying around $6.7 million into the settlement fund. Another $268,312 is slated for the California Labor and Workforce Development Agency, regarding the complaint's state claims. 

Attorneys also requested an award at a third of the settlement amount, valued at just over $2 million. Better is required to fund the settlement either by Jan. 8, 2027, or 10 days after the agreement becomes effective. 

While plaintiffs calculated lawsuit damages of approximately $13.9 million, their attorneys wrote that the settlement is an "excellent" result. 

Dominguez filed his lawsuit at the height of Better's operations, when it employed thousands of staff members and generated massive production volume during the refinance boom. The company has rebounded in recent years following a massive downsizing, although it was in the red in its most recent earnings report.