Real Estate Appraisers and Review Appraisers Should Be Paid Overtime, According to Conditionally Certified Collective Action

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Real Estate Appraisers and Review Appraisers Should Be Paid Overtime, According to Conditionally Certified Collective Action

Real Estate Appraisers and Review Appraisers Should Be Paid Overtime, According to Conditionally Certified Collective Action

Appraisers are not exempt “administrators” or “learned professionals” – they are production employees entitled to overtime pay, according to a class and collective action lawsuit against Bank of America brought by Bryan Schwartz Law, P.C.. On December 11, the United States District Court for the Central District of California, Hon. David O. Carter, ruled in favor of Plaintiff residential appraisers Terry Boyd and others by granting Plaintiffs’ motion for conditional class certification under the federal Fair Labor Standards Act (“FLSA”). The case is Boyd, et al. v. Bank of America Corp., LandSafe, Inc., et al. (No. 13-CV-561-DOC), and the Court’s order is available here.

Bryan Schwartz Law, P.C., along with co-counsel Schonbrun DeSimoneSeplow Harris & Hoffman LLP, represents the Plaintiffs, who are current and former residential appraisers and review appraisers for Bank of America / LandSafe (“BofA”). They claim that BofA misclassified them as “exempt” from the overtime requirements of federal law – the FLSA – and California state law (see our earlier posts regarding this and a similar case brought by Bryan Schwartz Law, P.C., here and here).

Residential appraisers inspect properties (usually single-family homes) day in and day out, churning out appraisal reports that provide an estimated value of the property as a necessary step in issuance of mortgages or other financial products sold by BofA. BofA appraisers are compensated under a plan that is designed to incentivize their increased production of appraisal reports, and appraisers are evaluated and paid based on their productivity. Review appraisers apply established criteria in making sure appraisal reports comply with regulatory and company requirements. Many BofA appraisers and review appraisers often work upwards of 60 hours per week, including weekends and holidays, without receiving overtime pay.

The Court’s ruling in December considered whether BofA appraisers and review appraisers across the United States are sufficiently “similarly situated” that they should be conditionally certified as a “collective action” under the FLSA, so that over 1,000 appraisers nationwide should receive a Court-approved Notice of the case, giving them an opportunity to join the suit. In concluding that BofA appraisers were entitled to certification, the Court relied on declarations from appraisers across the country demonstrating that their compensation plans and their duties are extremely similar, if not identical, throughout the company.

As the lawsuit progresses, the dispute will likely focus on whether appraisers fall within the exemptions to the federal overtime laws for “administrative” or “professional” employees. Plaintiffs maintain that the “administrative” exemption is not intended to cover employees like appraisers, but is meant to apply to personnel who are determining the strategic decisions of the company, who advise the company’s top managers directly, who act in a supervisory or managerial role, or who bind the company to major financial or policy decisions. BofA appraisers do not supervise anyone. They do not have the power to bind the company. They do not set policy or advise management.

In addition, federal regulations state that in order to fall within the administrative exemption, an employee must exercise “discretion and independent judgment with respect to matters of significance.” Although appraisers are legally required to have some level of independence from the Bank’s underwriting department when arriving at the valuation of a home, their discretion is closely restricted by BofA and regulatory requirements about the manner in which appraisal reports must be completed. In addition, each appraisal that an appraiser conducts relates only to an appraisal report costing several hundred dollars, for a single mortgage transaction, not to “matters of significance” to the “administration” of the Company — as contrasted, for example, with the policy-makers who decide on BofA/LandSafe’s appraisal practices generally.

Likewise, the “learned professional” exemption under California and federal law is meant to apply to individuals — like lawyers, doctors, certified public accountants, and teachers — who undergo a prolonged course of specialized instruction (typically, a year or longer) necessary to performing their job duties. Although appraisers undoubtedly acquire a lot of training in their years working in the field, the sort of apprenticeship and on-the-job learning they do, paired with just several weeks of classroom instruction, does not entitle BofA to deprive appraisers of overtime pay. In fact, many appraisers have a high school diploma — not an advanced post-graduate degree — and becoming an appraiser requires no specialized degree.

Because Plaintiffs believe these exemptions do not apply, they expect to prove that BofA misclassified them as exempt, and owes them back-wages for unpaid overtime work.

For more information about this case, or if you are interested generally in class actions seeking wages, please contact Bryan Schwartz at Bryan@BryanSchwartzLaw.com.

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