Rocket Mortgage has agreed to pay up to $3.5 million to settle a class action lawsuit from mortgage bankers claiming that the company failed to properly pay them overtime wages.
According to documents filed May 17 in U.S. District Court in Arizona, Rocket Mortgage and the plaintiffs, all former mortgage brokers for Detroit-based Rocket, reached the settlement during mediation in April. As part of the agreement, the company denied the claims and said it did not violate any federal, state or local law regarding any of its employees.
The lawsuit filed in Arizona last year claimed that Rocket Mortgage did not pay the correct amount of overtime wages and therefore violated the Fair Labor Standards Act.
"Defendant failed to properly incorporate the incentives, bonuses, and additional compensation paid to Plaintiffs in each pay period as part of the determination of their regular rate of pay," the complaint read. "As a result, Defendant failed to pay Plaintiffs overtime at a rate of 1.5 times Plaintiffs’ regular rate of pay pursuant to the FLSA."
There were 10 plaintiffs named in the lawsuit: nine Arizona residents and one Michigan resident. Each of them had worked for Rocket Mortgage for varying lengths of time before leaving at different points in 2022. The lawsuit said that each routinely worked more than 40 hours a week. While the employees received some overtime pay, they were not paid the correct amount, the lawsuit alleged.
Rocket Mortgage did not immediately respond Thursday to a request for comment.
In the agreement, the firm said that although it denies any wrongdoing, "Nevertheless, Rocket Mortgage desires to settle the Lawsuit finally on the terms and conditions set forth in this Agreement."
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