Gregory Lutz v. Huntington Bancshares, Inc.
815 F.3d 988
| 6th Cir. | 2016Background
- Plaintiffs (former Huntington underwriters) sued as a class under the FLSA claiming they were misclassified as exempt from overtime pay.
- District court certified a residential-loan underwriter class and granted Huntington summary judgment, holding underwriters are administrative employees exempt under 29 U.S.C. § 213(a)(1).
- Huntington’s underwriting workflow: Product Development and Secondary Marketing design loan products and set rates; loan originators and processors assemble application files; underwriters review documentation, verify accuracy, apply Bank Guidelines, and approve/deny loans.
- Underwriters rely on extensive Guidelines but may impose additional stipulations, approve exceptions/adjustments, make counteroffers, or flag suspicious loans.
- The Sixth Circuit reviewed whether (1) underwriters’ duties are ‘‘directly related to management or general business operations’’ (administrative vs. production) and (2) whether they exercise ‘‘discretion and independent judgment with respect to matters of significance.’n
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether underwriters are exempt administrative employees under the FLSA | Underwriters perform production work (the bank’s core activity of producing loans); they follow rigid manuals and thus lack genuine discretion | Underwriters perform non‑production, servicing work—analyzing risk and advising the bank whether to accept credit risk—so they are administrative | Court held underwriters are administrative employees and exempt |
| Whether underwriters’ work is ‘‘directly related to management or general business operations’’ | Underwriters merely apply credit policy and do not help run or manage the business; duties are part of loan production | Underwriters service the business by evaluating credit risk, akin to claims adjusters or financial‑services analysts—ancillary to selling loans | Court held work is directly related to general business operations (administrative) |
| Whether underwriters exercise discretion and independent judgment | Guidelines and manuals limit decisionmaking; underwriters are subject to review and lack authority to make significant, independent choices | Underwriters routinely compare options, impose stipulations, grant exceptions, propose counteroffers, and flag loans—exercising judgment on matters that affect the bank’s risk exposure | Court held underwriters exercise discretion and independent judgment on matters of significance |
| Applicability of Davis v. J.P. Morgan Chase (2d Cir.) | Davis supports plaintiff view that underwriters are production employees | Defendant distinguishes Davis as applying older regs and involving underwriters who only mechanically applied credit guides; Sixth Circuit precedent governs | Court rejected Davis as inconsistent with Sixth Circuit precedent and distinguished its facts |
Key Cases Cited
- Renfro v. Ind. Mich. Power Co., 370 F.3d 512 (6th Cir. 2004) (establishes administrative–production dichotomy; ‘‘servicing’’ business can be administrative)
- Renfro v. Ind. Mich. Power Co., 497 F.3d 573 (6th Cir. 2007) (an employee guided by manuals can still exercise discretion and independent judgment)
- Foster v. Nationwide Mut. Ins. Co., 710 F.3d 640 (6th Cir. 2013) (claims‑investigation work is administrative and analogous to claims adjusters)
- Davis v. J.P. Morgan Chase & Co., 587 F.3d 529 (2d Cir. 2009) (held loan underwriters were production employees; distinguished by Sixth Circuit)
- Martin v. Ind. Mich. Power Co., 381 F.3d 574 (6th Cir. 2004) (discusses ‘‘matters of significance’’ and narrow construction of exemptions)
- Schaefer v. Ind. Mich. Power Co., 358 F.3d 394 (6th Cir. 2004) (limitations on labeling collateral duties as administrative)
- Ale v. Tenn. Valley Auth., 269 F.3d 680 (6th Cir. 2001) (discusses constraints of manuals on discretion; treated as persuasive but not controlling in this case)