Late last week a class action suit brought by UPS delivery drivers against their employer was settled for $12.8 million.  The suit alleges that the drivers were misclassified as independent contractors and wrongfully denied benefits and overtime as a result.  At least 83% of the $12.8 million is to go to the approximately 660 employees.  The plaintiffs are expected to request about $2.02 million in costs and fees.  A copy of the complaint is available here.

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On November 20, 2009, the 2nd Circuit Court of Appeals held that a loan underwriter at J.P. Morgan Chase was not exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).  In Whalen v. J.P. Morgan Chase & Co., the employer claimed that loan underwriters perform work directly related to management policies or business operations and regularly exercise discretion and independent judgment, in accordance with 29 C.F.R. § 541.2(a).  However, the Second Circuit looked to 29 C.F.R. § 541.205(a), which distinguishes exempt administrative work from nonexempt production work, and key to its holding was that Whalen was given a detailed set of manuals and guidelines that he was to use to evaluate and approve or decline loan applications.  As such he wasn’t exercising the requisite discretion and independent judgment that are the hallmarks of an exempt position.  Rather, the Whalen Court determined that Whalen was more involved in the production of loans and therefore was primarily involved with the day-to-day carrying out of the business rather than ‘the running of [the] business [itself]’ or determining its overall course or policies.  As such the employer had improperly classified him as exempt under the FLSA because Whalen was, in fact, not employed in a bona fide administrative capacity.

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