Greist v. LendUS, LLC

Background

The plaintiffs alleged that LendUS, LLC and CrossCountry Mortgage, LLC maintained a policy or practice that discouraged Loan Assistants and Loan Processors from reporting overtime. They alleged that employees were assigned work that could not reasonably be completed in a 40-hour week and were instructed to record only their scheduled shifts, resulting in unpaid or underpaid overtime. The plaintiffs brought a proposed collective action under the Fair Labor Standards Act and a proposed class action involving California Labor Code claims.

The pending motions asked the court to conditionally certify the Fair Labor Standards Act collective and to apply equitable tolling to the statute of limitations for potential opt-in plaintiffs. Conditional certification is an early-stage decision allowing notice to be sent to workers who may choose to join the case. Equitable tolling pauses a filing deadline when fairness and the circumstances of the case justify doing so.

Conditional Certification

The court applied the first-stage standard for Fair Labor Standards Act collective actions because the parties had not yet conducted significant discovery. At this stage, the court generally considers the pleadings, declarations, and limited evidence under a lenient standard. The plaintiffs needed to provide substantial allegations, supported by declarations or discovery, that the proposed participants were similarly situated and were affected by a common decision, policy, or plan.

The court held that the plaintiffs met that burden. The complaint alleged a common and widespread practice discouraging overtime reporting. Declarations from Zimmerman and Green described their job duties, unpaid overtime, meal-break issues, conversations with supervisors, and discussions with other Loan Assistants and Loan Processors about overtime expectations and underpayment. The court found these allegations sufficient at the preliminary stage.

The court rejected LendUS’s arguments that certification was unsupported by credible evidence, that some overtime had been approved, and that the plaintiffs’ declarations lacked sufficient detail. The court explained that credibility assessments, weighing evidence, and examination of the merits are generally inappropriate before discovery at this stage. The court also rejected arguments that the claims would require too much individualized testimony and declined to impose an additional requirement that the plaintiffs show existing interest from potential opt-in workers.

The court granted the motion for conditional certification and defined the collective as:

All Loan Assistants and Loan Processors, however variously titled, employed by LendUS at any time during the three years preceding September 4, 2024, who did not receive compensation for all of their overtime hours worked.

The court did not yet approve the proposed notice or resolve all disputes about the employee information LendUS must provide. It ordered the parties to meet and confer and jointly file proposed notice language, a stipulation concerning the data LendUS must produce, and a proposed notice procedure by June 16, 2025. If they could not agree, they could file a joint dispute letter brief by that date.

Equitable Tolling

The plaintiffs sought to toll the statute of limitations from April 23, 2024, when the initial complaint was filed, through the date of the order. The court did not find that LendUS had engaged in wrongful conduct or bad-faith delay. It nevertheless found that circumstances beyond the plaintiffs’ control justified equitable tolling.

The court identified delays arising from the court’s docket, the sequencing of pending motions, and LendUS’s decision to delay filing a substantive opposition to conditional certification while preserving its arbitration position. The court found that these events significantly shortened the time available for potential opt-in plaintiffs. It also found no prejudice to LendUS from tolling, while potential opt-in plaintiffs could face substantial prejudice if their claims expired through no fault of their own.

The court rejected LendUS’s arguments that the plaintiffs were not diligent and that equitable tolling could not apply to potential opt-in plaintiffs who had not yet been identified. The court concluded that the litigation’s delays provided an adequate basis for tolling in this case.

The court granted the equitable-tolling motion, but not for the full period requested. It held that tolling would begin on September 4, 2024, the date the plaintiffs filed their motion for conditional certification, rather than April 23, 2024. The statute of limitations will remain tolled until notice is sent to potential opt-in plaintiffs.

Disposition

The court granted the plaintiffs’ motion for conditional certification and granted the plaintiffs’ motion for equitable tolling. The order disposed of Docket Nos. 40 and 45. It required the parties to file an agreed notice form and procedure, or dispute briefing, no later than June 16, 2025. The order was a preliminary collective-action and limitations ruling; it did not decide whether the alleged Fair Labor Standards Act violations occurred.