Department of Labor sues Jericho Mortgage
By LISA D. BURDEN
2/28/2006

The Department of Labor has filed a lawsuit against two Ohio-based mortgage companies which it claims failed to pay their sales agents more than $220,000 in back wages. But the companies' owner has vowed to fight the action, claiming that his employees were properly paid on a commission basis.

The filing in Ohio federal court followed an investigation by the department into Double Eagle Financial Corp. and Platinum Brokerage Ltd., which both do business in the Columbus area as Jericho Mortgage.

The government said that from May 2003 the companies failed to pay the minimum wage rate, failed to pay overtime compensation for hours worked in excess of 40 a week and failed to maintain accurate records of the hours worked for 54 employees who worked as loan officers or sales managers. They were all paid on a commission basis and received no pay during periods when no loans were closed.

The agency is attempting to recover between $45 to $17,000 per employee.

Rodney K. Cotner, the companies' owner, said he is unfairly being singled out as his pay practices for loan officers mirror what others in the other industry are doing. He pointed out that he worked as a loan officer several years ago before putting together his own business and that he was paid on a commission-only basis. Cotner also said that some of the employees named in the lawsuit worked for him less than 40 hours a week and made more than $150,000 a year. “It's not like these people got abused and used,” he said.

Department of Labor spokesman Brad Mitchell said that it's a large case because of the amount of money involved.

The Fair Labor Standards Act requires employers to pay employees the federal minimum wage for all hours worked and time and one-half the regular rate of pay for hours worked over 40 in a week unless the employee is exempt from overtime pay. Employers must also keep accurate time and payroll records.

Mitchell said the government finds out about alleged violations in one of three ways: a business competitor complains, a complaint is made by a worker or former worker or alleged violations are discovered during a routine scheduled investigation. In keeping with the department's policy of protecting the privacy of the complaint, he declined to specify how the federal agency found out about the alleged violations involving Jericho.

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