California Assembly Bill 5, which seeks to codify the Dynamex decision into law, recently passed the California House and is being sent to the Senate for final vote. Assemblywoman Lorena Gonzalez (D-San Diego) authored the legislation, last year. For years, the National Association of Mortgage Field Services (NAMFS) has known about the fact that its Membership purposefully misclassify employees as subcontractors. There are multiple federal settlements and federal jury verdicts attesting to such. And for years, Eric Miller, NAMFS Executive Director, led the charge to keep the atrocities secret. In fact, the only mortgage field services Industry trade association whom have spoken out upon the matter is the International Association of Field Service Technicians (IAFST). The IAFST published a White Paper, last year, addressing the matter.
According to the three-pronged (or ABC) test under the Dynamex decision, the state considers a worker an employee unless the hiring entity establishes all of the following factors:
- The hiring entity does not control or direct the work, both in fact and according to the contract for the work’s performance.
- The worker performs tasks that are outside of the usual course of the hiring entity’s business.
- The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.
The Dynamex decision not only expanded the definition of “employee” under the California Wage Orders, but it also places the burden on companies to prove that independent contractors are properly classified.
The Dynamex decision only applies to wage orders. However, if passed, AB 5 would extend the ABC test to all provisions of the California Labor Code and Unemployment Insurance Code unless another definition of “employee” is provided. So, for example, the ABC test would apply to a labor-code claim for wrongful termination in violation of public policy. Although the bill would exempt certain occupations—such as doctors, investment advisers and some direct sellers—gig-economy workers aren’t included in the exemptions. The business community is trying to change that before the bill is finalized.
And for all the bravado that NAMFS Members continue to churn out, the reality is that you cannot contract away the fact that they are misclassifying employees. Ironically, NAMFS itself has purposefully remained silent. In fact, while Miller is paid over One Hundred and Twenty Thousand Dollars per year, Miller specifically instructed the Membership to work out the issue amongst themselves. To put Miller’s salary into perspective, it consumes over EIGHTY PERCENT of all NAMFS Member dues.
Beginning with Hurst v Buczek Enterprises wherein Buczek Enterprises paid Field Service Technician Brad Hurst “six figures” to settle a claim of employee misclassification and continuing with the Vinson Settlement wherein Mortgage Contracting Services (MCS), a subsidiary of VPS Holdings LTD, paid millions to keep Field Service Technician Bennett Vinson silent, the Mortgage Field Services Industry is reeling and many are asking why Eric Miller, Executive Director of NAMFS refused to allow discussions with respect to this subject. Recently, in the Bowerman jury verdicts, 7 out of roughly 150 cases found awards of $2.2 Million against Assurant Field Asset Services (AFAS). And only last week, the California Supreme Court overturned twenty five years of erroneous employee labor law and charted a new course by adopting the “ABC Test” long held by states like Massachusetts. That ruling determined that not only were truck drivers employees, but overturned the Uber and Lyft rulings, both put on hold during the pendency. Finally, the California Employment Development Department (EDD) began assessing millions of dollars in fines against NAMFS members for willfully misclassifying employees throughout California
Nearly two years ago, the International Association of Field Service Technicians (IAFST) promulgated the below White Paper on Employee Misclassification. To date, NAMFS has done nothing. NAMFS has written nothing, NAMFS has advocated for nothing. And NAMFS has taken its Membership’s money and provided nothing. Once stalwart NAMFS Members have now begun to express their frustration with the Miller Regime by leaving in droves. In fact, over the past 24 months, NAMFS has lost dozens of members with contracts valued in the billions of dollars.
Today, firms like Safeguard Properties, Cyprexx, and Mortgage Contracting Services are no longer capable of recruiting Labor nor retaining the Labor they have. It is not simply that they are NAMFS members or the horrific fraud they have perpetrated against innocent Minority Females and Labor, the fact of the matter is that the vast majority of skilled Labor have found a thriving economy in which they are actually paid. Additionally, Labor is realizing that NAMFS member purposeful misclassification of employees has gone on long enough.
Years ago, Eric Miller was made aware that NAMFS members were purposefully misclassifying employees as independent contractors. Judge Edward Chen of the U.S. District Court for the Northern District of California ruled as much in Hurst v Buczek back in 2012. Brad Hurst sued NAMFS member Buczek Enterprises whom were forced to pay a six figure settlement. And it is the very same Judge Chen whom is presiding over the Uber employee misclassification today.
“Diva’s allegations support the inference that Uber could not have undercut market prices to the same degree without misclassifying its drivers to skirt significant costs,” the judge wrote in the June 20 ruling. And the same applies to our Industry today. The judge went further, though,
Uber’s alleged misclassification of drivers as independent contractors could significantly harm competition and violate the spirit of antitrust laws — Judge Chen’s ruling earlier this week.
And the perpetuation of fraud appears to know no limits when it comes to NAMFS members. Over the past week, the US Department of Housing and Urban Development (HUD) was forced to pull yet more Management and Marketing (M&M) Field Service Manager (FSM) contracts away from firms such as BLM Companies. Following in the path of Innotion Enterprises and Purdy Enterprise, HUD refused to renegotiate with BLM Companies and awarded bridge contracts to firms such as Guardian Asset Management. BLM Companies chose to challenge HUD’s decision in two GAO Protests located here and here. Many have questioned HUD M&M Director Cathy Baker’s decision to allow each and every NAMFS member failing to provide services in a proper fashion to simply walk away only to recompete next month. And Baker’s unilateral award of hundreds of millions of dollars in contracts to PK Management, Alpine Companies, and Guardian Asset Management — without open and transparent competition — has many questioning whether or not the HUD system is rigged.
With respect to Guardian Asset Management, Foreclosurepedia was requested to recruit personnel and has done such. Our concern, though, is that Guardian Asset Management has remained silent with respect to the recruiting process. Guardian Asset Management has chosen not to speak to Labor, whom submitted their information, with respect to how Labor would be protected if Guardian Asset Management is not capable of protecting their HUD Awards. And finally, Foreclosurepedia is paused by Guardian Asset Management’s cavalier attitude when it comes to speaking directly to us.
Are we witnessing a repeat of Asset Management Specialists (AMS)? Well, the lack of communication with Labor is definitely a hallmark. I have never believed in coincidences and they are everywhere in the latest iteration of HUD’s non compete release of its awards. Guardian Asset Management is located in the same facility as the former AMS, in Levittown, PA. Jerry Mavellia, the former Chief Operating Officer of AMS is now the CEO of Guardian Asset Management. Ernie Stefkovic, former AMS owner is one of the Directors at Guardian Asset Management. And finally, Lee Mertins, the right hand henchman whom maintained destroyed Minority Females and Labor on behalf of AMS, is now CEO of Assero, whom are all over Levittown, blowing up recruiting on LinkedIn! Coincidence? Maybe and maybe not.
NAMFS one and all. And it is not simply NAMFS whom are doing their best to ensure that Minority Females and Labor continue to live in poverty and fear. Wells Fargo, in conjunction with Brookstone Management, have been doing their best to keep Labor down. Larger NAMFS firms have exited from servicing the Wells Fargo portfolio due to Wells Fargo’s refusal to pay and Brookstone Management is now embroiled in arbitration battles in the South. All of this underway as the next wave of storms have begun to pepper the Midwest and the 2019 Hurricane Season has begun.
The refusal of the Mortgage Field Services Industry to work equitably with Minority Females and Labor is highlighted by NAMFS member’s refusal to communicate directly with the very people whom perform the services.
What is Labor to do? Well, for starters, joining the IAFST is in their best interests. And second, as we will discuss in our next article, understanding the impacts of Dynamex on NAMFS member’s ability to misclassify employees is critical. In fact, 397 Inspectors in Georgia recently found out that when Labor stands together, the federal courts will support them!