Rocket Mortgage settles overtime class action for $3.5 million

Rocket Mortgage is moving to settle an overtime class action suit lodged against it last year in Arizona, agreeing to dole out $3.5 million.

The suit, originally filed in January 2023 by a group of loan officers, accused the megalender of violating the Fair Labor Standards Act by failing to compensate them for all hours worked.

Out of the sum, $1 million will be paid to attorneys representing the class, while no less than $25 shall be doled out to each class member, the settlement agreement dated May 17 said. 

Despite moving to quash the suit, Rocket "denies and continues to deny the allegations contained in the plaintiffs' lawsuit or that it violated any federal, state or local law, breached any duty, failed to pay any employees as required by law," the company's filing said.

"Nevertheless, Rocket Mortgage desires to settle the lawsuit finally on the terms and conditions set forth in this agreement," the legal document reads.

The mortgage shop did not immediately respond to a request for comment Tuesday.

Both parties have until May 30 to submit to an Arizona federal court a stipulated order for approval of this agreement. After that, Rocket will have 60 days to pay the gross settlement and the case will be dismissed with prejudice, meaning plaintiffs cannot refile the same claim in that court.

At least one other similar lawsuit is pending against Rocket Mortgage in the state of Michigan.Per the suit filed on Aug. 10, 2023, former staffers Brittany Roseboro and John Glover claim the company made employees attend pre-shift meetings before permitting them to clock in. Additionally, Rocket required employees to take mandatory training that they were not compensated for and to boot up and log in to their work computers prior to clocking in, the suit said.By doing so, Rocket "willfully" violated the Fair Labor Standards Act and the Michigan Workforce Opportunity Wage Act (WOWA), plaintiffs claim.The megalender has disputed such claims in the past, noting "we are confident we will be vindicated from the false allegations once the facts of the case are presented."

Apart from Rocket, other mortgage players have had similar accusations slung against them including Bank of America, PHH Mortgage and United Wholesale Mortgage.

UWM, which was accused of not paying its account executives for working beyond 40 hours per week, moved to settle the suit for $2.75 million in June 2022.