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After 7 Year Battle, Minces PLLC Obtains Victory Against O’Connor & Associates in FLSA Collective Action Overtime Lawsuit

September 20th, 2018 by David Minces

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Minces PLLC is proud to report that earlier this week we obtained a $286,671 judgment (plus fees and costs) against O’Connor & Associates, the largest property tax firm in the United States. We represented 11 former employees in a fight that lasted 7 years.

Our clients were all residential property tax consultants who worked for O’Connor & Associates protesting property taxes for homeowners. All of our clients worked very long days, sometimes lasting up to 16 or even 18 hours. At night they prepared protest files that were provided to them by Pathfinder (O’Connor & Associates’ Indian subsidiary), where over 400 employees generate property tax protest files containing about 50-100 pages of information about each property. Property tax consultants prepared the files by removing extraneous or irrelevant information based on guidelines and training provided by O’Connor & Associates and then made 4 copies of the relevant material for each file to be used at protest hearings.

Our clients spent their days at the county appraisal districts they were assigned to (Harris County Appraisal District (HCAD), Montgomery County Appraisal District (MCAD), Dallas County Appraisal District (DCAD), etc.) where they were required to report to work before 7:30am, often 6 days per week. While there, the consultants attended formal or informal hearings (or both) at the appraisal district. The consultants were tasked with preparing for and attending an average of 65 hearings per day (which totaled approximately 3,250-6,500 pages of material to review at night). The hearings were monotonous. Informal hearings were a lot like one-on-one negotiations, and the consultants were trained and provided materials to negotiate with by O’Connor & Associates through Pathfinder, but only within narrow parameters. Formal hearings were more structured and required consultants to provide an “opinion of value” for the home they were protesting. However, the “opinion” was typically a number prescribed by O’Connor & Associates, as was the supporting documentation to justify it. Although the hearings were usually relatively brief, attending as many as 65 in a single day made for long, exhausting days.

After leaving the appraisal district, consultants were required to stop at O’Connor & Associates’ office to pick up the 65 files they would need to prepare for the next day. Preparing the files (known as “prepping”) took several hours of time each night. Sometimes, consultants were also required to attend Saturday hearings.  As one of O’Connor & Associates’ managers admitted during trial: you had to prepare each file in less than 10 minutes if you wanted to sleep at night (preparing 65 files at a rate of 10 minutes per file would take you 650 minutes or nearly 11 hours).

During the property tax protest season (which typically ran from April to October, but sometimes lasted until February of the following year), the Plaintiffs worked an average of 60-90 hours per week. Their pay, which was a “salary” plus a small commission, paled in comparison to the hours they were putting in. In addition to the fact that it was already a fairly low rate when compared to the amount of hours the Plaintiffs were working, their pay was sometimes docked for undocumented “rules violations” or absences for illness. There were numerous rules pertaining to preparing files, what values employees could use during formal and informal hearings and attendance. These rules were monitored by supervisors of O’Connor & Associates who would stay at the appraisal district with the consultants, as well as management of O’Connor & Associates who would review hearing results and reports from the on-site supervisors and determine the assessment of penalties. The paychecks were confusing, so our clients could not always tell how or why their pay had been docked. Further, when they asked for clarification, management could not explain the pay stubs or why deductions were made.

One particularly unsavory rule that the property tax consultants had to follow (or risk fines or a firing), was actually one that could potentially harm the homeowners they were supposed to be representing. This rule required consultants to reject a reduction to the value of the client’s home, even if it was exactly what the property tax consultant had asked for, and even if the appraisal district agreed to it, and even if it would save the homeowner money. The consultants sometimes violated this rule to avoid harming the homeowner as a result of O’Connor & Associates inflexible procedures, but they did so at the risk of being fired.

The grueling hours O’Connor & Associates required of property tax consultants resulted in a short stint for most. The average tenure of a property tax consultant at O’Connor & Associates was approximately 4 months. Sometimes the company would rehire a former property tax consultant the following season. This enabled O’Connor & Associates to avoid paying sick or vacation benefits, since employees do not qualify for benefits for 6 months. Even if the consultant was rehired, the clock to qualify for any sick pay or benefits restarted.

Since most of the consultants didn’t qualify for sick or vacation pay and all were misclassified as “salaried,” they received no overtime pay. On top of that, when they worked less than 40 hours (because they were sick or simply exhausted from working such long hours), they did not receive their full “salary” because their pay was docked for any absences. This kind of payment scheme is not a true salary, which requires a fixed rate of pay that cannot be docked in this manner. As one manager for O’Connor & Associates admitted during trial, property tax consultants were really just “paid by the day.”

United States District Court Magistrate Judge Frances Stacy found that O’Connor & Associates violated the Fair Labor Standards Act (“FLSA”) by failing to pay overtime to property tax consultants. As a result, the consultants, who were misclassified as exempt, were entitled to recover 100% of their unpaid overtime. The FLSA mandates that employers pay their employees time and one half for each hour worked over 40 in a workweek. Our clients were awarded overtime ranging from $7,000-$51,000 per person, depending on their length of service and salary. The total amount O’Connor & Associates now owes our clients as a result of the judgment is $286,671. Further, Patrick O’Connor and his wife Kathleen O’Connor (the owners of the company) were also found jointly and severally liable, and are thus legally responsible for satisfying the judgment.

Has this company changed its ways? If not, we hope this judgment will be a wakeup call that motivates O’Connor & Associates and other companies to pay their employees an honest wage for an honest day’s (or night’s) work. After all, the law requires it.

All of us at Minces PLLC are very happy to have recovered every dollar of unpaid overtime that our clients sought. If you think you may be owed overtime wages contact our firm, we would love to help.

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