Facts

Thuan Nguyen is the founder and broker of California-based Loan Factory Inc. Loan Factory is mortgage-broker service specializing in residential mortgages, online lending and real estate. Through its website, it provides borrowers with real-time, customized rates. Anh Duong and Chau Ngoc Bao Phan worked for Loan Factory, as loan officer assistants, and were paid primarily on a salary, commission and/or piece-rate basis. They filed a class action lawsuit against Loan Factory and Nguyen, alleging that they and others were misclassified as exempt and, other wage and hour violations.

PLAINTIFFS' CONTENTIONS: Plaintiffs, Duong, Phan and others, contended that defendants violated several wage and hour laws. Typically, plaintiffs alleged that they worked at least ten hours per day. As for payment, plaintiffs noted they were misclassified as exempt and were paid with a salary and/or commission and/or piece-rate basis. Moreover, plaintiffs failed to meet the inside sales test because they were not paid 1.5 times the minimum wage and did not spend more than 50 percent of their time performing sales activities, nor did they receive more than 50 percent of their pay on a commission basis. Also, as plaintiffs worked outside of defendants' facility, they were precluded from applying the outside sales exemption and they did not meet the managerial/administrative exemption. As to their meal periods, plaintiffs stated that they were unable to take timely, duty-free, 30 minutes of uninterrupted meal periods and were often forced to take late meal period or work through part or all of their meal periods because of the nature and constraints of their work. Comments from management pressured them to take non-compliant meal breaks or to skip their meal periods entirely. Plaintiffs were also required to monitor and take their cellphones or other communication devices with them at all times during their workday including meal periods so that essentially during their meal times, they were on duty. Furthermore, Defendants implemented a policy and practice of requiring plaintiffs to perform regular work, off-the-clock which included taking calls when out of the office, in the evenings or on weekends. As to business-related expenditures, defendant failed to reimburse for such expenses incurred by plaintiffs that directly related to their duties. As an example, defendants instructed and required plaintiffs to use their personal cell phones and/or other communication devices for work-related purposes, such as responding to customer inquiries, and yet, did not reimburse plaintiffs for cell phone or data plan charges that they incurred.

DEFENDANTS' CONTENTIONS: Defendants, Loan Factory and Nguyen, denied all plantiffs' contentions.

Result

The motion for preliminary approval of the class action settlement was granted for $1 million. The final approval hearing is set for September 28, 2022.