## Facts

- Current and former employees of Wells Fargo Home Mortgage (Wells Fargo), all non-California residents, sued Wells Fargo alleging they were denied overtime pay.
- The employees worked as Home Mortgage Consultants (HMCs), selling mortgage-loan products and generally earning commissions under a companywide compensation plan.
- Plaintiffs alleged Wells Fargo classified HMCs as exempt from overtime requirements on a broad, companywide basis and that HMCs routinely worked more than 40 hours per week without overtime pay.
- Plaintiffs asserted federal claims under the Fair Labor Standards Act (FLSA) and also brought claims under California’s Unfair Competition Law (UCL), using the alleged FLSA overtime violations as the “unlawful” predicate for UCL relief.
- Plaintiffs moved for certification of (1) a Rule 23 class for UCL restitution and (2) a nationwide FLSA collective action so other HMCs could receive notice and opt in.
- To support certification, plaintiffs submitted declarations describing similar job duties and overtime practices.
- Wells Fargo opposed certification, contending that: (1) the employee declarations were so similar they were unreliable; (2) most declarations came from two Midwestern branches and did not reflect practices across roughly 1,600 offices; (3) several declarants worked in a temporary refinance office that was not representative; and (4) many HMCs preferred the commission system and would not benefit from the lawsuit.

## Issues

1. Whether plaintiffs satisfied Rule 23’s requirements to certify a class of non-California HMCs pursuing UCL restitution based on alleged FLSA overtime violations.
2. Whether plaintiffs made a sufficient showing that HMCs were “similarly situated” to conditionally certify a nationwide FLSA collective action and authorize notice to potential opt-in plaintiffs.

## Decision

- The court certified a Rule 23 class for the non-California HMCs’ UCL claim seeking restitution based on the alleged FLSA violations.
- The court found Rule 23(a) satisfied, concluding numerosity was met given the size of the workforce; commonality existed because the exemption classification and compensation structure presented shared questions; typicality was satisfied because the named plaintiffs’ claims arose from the same alleged practices; and adequacy was satisfied based on the representatives and counsel.
- The court found Rule 23(b)(3) satisfied, determining that common questions—particularly whether Wells Fargo’s HMC position was properly treated as overtime-exempt—predominated over individualized issues for purposes of class treatment, and that a class action was a superior method of adjudication for a dispersed group of employees.
- The court rejected Wells Fargo’s attack on the employee declarations, concluding that similarities among declarations and geographic concentration went to the weight of the evidence and did not defeat certification at this stage, especially where plaintiffs alleged companywide policies and uniform classification.
- The court also conditionally certified a nationwide FLSA collective action, concluding plaintiffs made the required preliminary showing that HMCs shared material similarities (job title, compensation method, and exemption classification) warranting collective treatment and court-authorized notice.
- The court declined to deny certification based on Wells Fargo’s argument that many HMCs preferred commissions, reasoning that a worker’s preference or ultimate net benefit does not bar certification where the legal question is whether overtime wages were unlawfully withheld.

## Legal Principles

- Rule 23(a) can be satisfied in misclassification and overtime cases when a large group of employees holds the same position and is subject to a common exemption classification and pay plan, even if day-to-day experiences are not identical.
- Under Rule 23(b)(3), predominance may be met when a central, shared liability question—such as whether a position is properly classified as exempt—can be addressed with common evidence, and variations among employees primarily affect damages or do not outweigh the common proof.
- For superiority, a class action may be appropriate where employees are geographically dispersed and individual claims may be too small to litigate efficiently on a one-by-one basis.
- Attacks that supporting declarations are “cookie-cutter,” drawn from a subset of locations, or include employees from a nonstandard office generally do not defeat certification where the record still shows shared policies and where the objections relate to merits disputes or evidentiary weight.
- At the notice/conditional-certification stage, the FLSA’s “similarly situated” standard is less demanding than Rule 23(b)(3) predominance; showing a common job title, compensation method, and a uniform exemption classification can justify a collective action and notice to potential opt-in plaintiffs.

## Conclusion

The court certified a non-California Rule 23 class pursuing UCL restitution predicated on alleged FLSA overtime violations and conditionally certified a nationwide FLSA collective action for HMCs, finding that the claimed companywide exemption classification and shared features of the HMC role supported class and collective treatment despite Wells Fargo’s objections to the employee declarations and asserted workplace variation.


In re Wells Fargo Home Mortgage Overtime Pay Litigation, 527 F.Supp. 2d 1053 (2007)