Lenders Title Faces Two Labor Lawsuits

A computer technician for Lenders Title Co. was fired for reporting sexual harassment to his superiors, according to a lawsuit filed in Washington County Circuit Court in May.

Martin Gilzow, the former technician, said he traveled from Little Rock to Lenders’ Rogers office to work on the computer system.

While there, he was “approached by several female employees of Lenders and was told the male general manager of the office was creating and perpetuating a sexually hostile environment that included sexual harassment and sex discrimination,” the complaint states.

The manager wasn’t named in the lawsuit.

The complaint doesn’t say Gilzow witnessed the activity first-hand.

Gilzow reported what he had been told to Teana Bradford, chief operating officer Lenders’, who then began an intra-company investigation, the paperwork said.

Several days later, Gilzow met with Micheal Pryor, president and CEO of Lenders in Little Rock.

“Pryor became angry during this conversation and informed [Gilzow] that he was terminated immediately,” the suit stated.

Gilzow is suing Lenders for retaliation, failure to pay overtime and unlawfully classifying him as a contract employee and therefore rendering him not eligible for full-time employee benefits.

But the potential trouble for Lenders Title doesn’t stop there.

Another former employee who worked in the Rogers office also has filed a lawsuit against the company. Sharon Hensley’s complaint states that she too was not paid for time she worked over 40 hours a week.

Linked Lawsuits

On the surface, the lawsuits don’t appear connected, but both were filed by the same lawyer — Joseph Gilker, a partner with Gilker and Jones P.A. in Mountianburg — and both pertain to the Rogers office.

Gilker declined to comment on either case.

Gilzow and Hensley admit that they know each other and would have worked, at least temporarily, at the Rogers office at the same time.

Lynden Polk, manager of Lenders’ Rogers office, referred a phone call to the company’s in-house legal council and wouldn’t comment. When pressed to answer questions about the complaints, he said “thank you” and hung up.

Gilzow would not talk at length about the suit but did say that he worked for Lenders “40 to 90 hours a week — whatever it took.”

He said he believed he had a contract with the company, but apparently the company didn’t think so, and that’s one of the reasons for the lawsuit.

Russell Gunter, a partner with Cross, Gunter, Witherspoon & Galchus P.C. in Little Rock, is the attorney representing Lenders Title in both cases and Michael Pryor in the case in which he is named.

Gunter said his firm filed an answer to both suits denying the allegations, and he declined to comment beyond those filings.

Pryor, who has been CEO of Lenders Title for about five years, said there have been no other labor-related conflicts during that time.

“I don’t want to try this in the papers,” Pryor said from a Chicago hotel room where he was attending a conference.

“I can’t comment on pending litigation,” he said. “We look forward to our day in court.”

Lenders Title operates 14 offices in central and northern Arkansas, with one each in Fayetteville, Springdale and Rogers. The company is owned by Pulaski Investment Corp., a holding company that also owns Pulaski Mortgage Co. and Pulaski Bank & Trust Co., a Little Rock-based bank with $424 million in assets. The company is not affiliated with Pulaski Financial Corp. of St. Louis.

Gilzow’s Complaint

According to Gilzow’s lawsuit, which was filed on May 5, he was an employee of Lenders Title from Feb. 1, 2000, to May 7, 2004, as a computer network technician at the company’s Little Rock office. The suit stated that he was employed under successive one-year contracts.

The first count in the complaint seeks back pay and compensatory and punitive damages from Lenders and Pryor, as well as costs and attorney’s fees.

Martin Gilzow’s second count claims he was not exempt from the overtime compensation requirement of the Fair Labor Standards Act, and that he was never compensated for hours worked beyond a 40-hour workweek.

His third count claims he was unlawfully classified as an independent contractor and therefore was not allowed to participate in health and welfare, benefits and pension plans, such as a 401(k), sponsored by Lenders.

This, the complaint states, is a violation of the Employee Retirement Income Security Act of 1974.

Gilzow is seeking damages in excess of $75,000 plus attorney’s fees and costs.

When he was fired, Gilzow was a resident of Little Rock, but has since moved to Sprindale. That’s why the lawsuit was filed in Washington County.

The complaint was initially filed in Washington County Circuit Court because it was past the 180-day statute of limitations. The defending attorney has since filed for a removal from the Circuit Court, and the case is now in federal court in Fayetteville.

Hensley’s Complaint

Hensley’s lawsuit, which was filed on May 12 in federal court in Fayetteville, invites other individuals to join the complaint.

It states that she was employed at both Lenders’ offices in Springdale and Rogers from January 2000 to about Dec. 31, 2004.

She was told to not keep track of her time and she was not “effectively released from her job for lunch breaks even though she was not paid for that time,” the suit states.

She was also given a key so she could “come in early and leave late.”

Like Gilzow, Hensley’s complaint claims that as a full-time employee, she was not exempt from overtime compensation requirements of the Fair Labor Standards Act.

The suit seeks compensation in the form of unpaid overtime wages, an equal amount in damages and attorneys’ fees.

A non-jury trial is set for the week of Feb. 27, 2006, for Hensley’s complaint.

Hensley also declined to discuss her complaint, but she said, “I thought about this a whole lot before I did it.”

A Sticky Question: Exempt or Not Exempt?

Both Martin Gilzow’s and Sharon Hensley’s success in court will in part rely on the interpretation of their jobs at Lenders Title.

A portion of the Fair Labor Standards Act as amended states “no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods … for a workweek longer than 40 hours unless such employee receives compensation for his employment in excess of the hours … at a rate not less than 1.5 times the regular rate at which he is employed.”

But there are exceptions.

Terri Chadick is a partner at Conner & Winters’ Fayetteville office and she specializes in employment law. She said the overtime exemption is a difficult issue and one that trips up many employers.

One mistake employers make, she said, is to assume that if an employee is salaried, then they are automatically exempt from overtime pay.

That’s not always the case, she said.

The U.S. Department of Labor recently revised the so-called “white collar exemptions” that rule whether an employee is exempt or not, and Chadick thinks this may lead to more complaints and lawsuits in the future. She said she’s seen several statewide Department of Labor investigations recently.

Basically, an employee who earns less than $23,600 a year should be paid overtime, she said.

“It’s a really complicated area,” Chadick said.

Besides consulting an employment lawyer on a regular basis, Chadick recommends small business owners keep job descriptions for each position and compare them with the DOL’s regulations and review them with employees annually.

“Key is the job description,” she said. “I do think employers need to be proactive.”

Current regulations about overtime pay and exemptions can be found at the DOL’s Web site, www.dol.gov or at www.elinfonet.com.