Freedom Mortgage has agreed to pay a $750,000 settlement to resolve a Fair Labor Standards Act complaint from a class of over 900 employees. 

A federal judge last month granted preliminary approval to the agreement between the large lender and servicer and remote call center employees. The lawsuit filed last March claims that current and former staff worked unpaid overtime by spending extra time logging into Freedom's numerous software before being required to answer calls immediately upon clocking in.

Further, the plaintiffs say they were paid various non-discretionary bonuses that Freedom didn't include in their regular rates of pay, when the company calculated their overtime pay rates. Freedom denied the accusations in the settlement. 

The class covers staff who worked at least 38 hours per week in a call center role between March 2022 and March 4, 2026. According to case filings, the settlement would include over 700 individuals in a New Jersey class; more than 100 employees in an Oregon class; and at least 70 staff in a Pennsylvania class. 

Class members will receive a net settlement fund of $462,500 distributed on a pro rata basis, based on a points system per hours worked. Class counsel will receive $250,000, or a third of the settlement. The remaining settlement funds include four- and five-figure awards for three named plaintiffs, and payment for the settlement administrator. 

Neither a spokesperson for Freedom nor attorneys for the sides responded to requests for comment Monday. 

The allegations

The plaintiffs, customer service agents, allege their workload nearly doubled in early 2024 when Freedom implemented new artificial intelligence software. Because of that change, call center workers were asked to work 1-to-2 "mandatory" overtime days per week, clock in over an hour earlier each day, and take a reduced, 45-minute lunch break. 

Employees had to log into multiple software programs before clocking in, which often took 7 to 10 minutes. Those include the platforms NICE, Sagent, Salesforce, Softphone, Freedom Engage, EDMS, and Duo. Freedom also has a policy barring workers from clocking in more than 3 minutes after the start of a scheduled shift, expecting them to take calls the moment their shift begins. 

"This makes it impossible for named plaintiffs and the putative plaintiffs to clock-in prior to completing their clock-in duties," the complaint read, referring to the software boot-ups. 

Employees' computers also log them out if they're away for more than five minutes, requiring more log-in time throughout daily breaks. 

The lead plaintiff in the case claims he met with Freedom's human resources team about the time issue, but the department didn't address his detailed complaint. 

Freedom in court filings suggested that if it fought the accusations, it would have argued that the pre-shift work isn't compensable under the FLSA, because it's not an "integral and indispensable" activity. 

A hearing for final approval of the settlement is scheduled for September.

Mortgage professionals have frequently filed FLSA lawsuits against their employers, with mixed success in recent years. Rocket Cos. paid $3.5 million to resolve wage claims from loan officers in 2024, while United Wholesale Mortgage paid $2.75 million to settle a case from account executives in 2022.