Dynamex Is Responsibility Of FSM According To HUD

The Honorable Ruth Kraft Advocates For "Flying Below The Radar" When It Comes To NAMFS And Labor

National Association of Mortgage Field Services (NAMFS) members cannot catch a break. The US Department of Housing and Urban Development (HUD) just mandated that the Management and Marketing (M&M) Field Service Manager (FSM) Prime Vendors are responsible for all provisions of state law in the jurisdictions within which they are operating including, you guessed it, Dynamex provisions. This is coming on the heels of the federal judiciary poised to remand cases such as GrubHub back to the state courts. Before we get to the judicial purview of Dynamex, let’s listen to what HUD had to say about Dynamex and their Prime Vendors in all states and territories,

The simple answer is that the FSMs, regardless of state, are required to abide by all state and local laws.  Since the California court has issued the Dynamex decision, the FSM contractors would be required to follow it. — HUD Senior Official, 18 October 2018

That statement is a shot heard throughout the federal contracting community. In the instant case, HUD is making no bones about the fact that they are not going to seek any exemptions from how the State of California — and other states poised to capitalize — prosecutes the enforcement of Dynamex. HUD is additionally telegraphing that they are not seeking protections for their Prime Vendors.

Ok. So, why is this serious to not only HUD Prime Vendors, but anyone whom is not actually providing physical services upon assets? Glad you asked that question. Last week, I had the opportunity to speak with Dan Eaton, a lawyer out in California whom wrote a great piece in the San Diego Union Tribune.

The state high court’s “ABC” test was announced in Dynamex Operations West, Inc. v. Superior Court in April. Under Dynamex, a worker is considered an independent contractor only if the hiring entity can show: (A) it doesn’t exercise the kind of control over the worker the hiring entity exercises over its employees; and (B) the worker’s tasks are not integral to the hiring entity’s business; and (C) the worker is engaged in an independent occupation or business and takes common steps to establish and promote an independent business.

Now, you do not have to be a jurist to read the layman’s explanation above. And while everyone is focused on the second prong of Dynamex, the reality is they ought to be terrified of the third prong. Rarely, if ever, have I interviewed a Member of Labor; a person actually doing the work, and any of them have common criteria used to measure whether someone is or is not an independent business.

The vast majority of people in the Mortgage Field Services Industry are not even legally licensed businesses. And for those whom are, very few of those entities even have branded email. Branded email is oft times used as a yardstick for determining whether or not someone is truly independent. It connotes a technological sophistication or financial wherewithal of independence. Whereas, emails such as aol.com; gmail.com; and hotmail.com almost positively reaffirm the Court’s position that there is simply no investment into an independent status.

That is why, as Eaton continues, how the Court of Appeal recently remanded itself, post Dynamex, and this should terrify NAMFS members,

It was not enough under Part C of the Dynamex test that BTG did not bar Garcia from engaging in an independent business. “Instead,” wrote the court of appeal quoting from Dynamex, “the inquiry is whether Garcia fits the common conception of an independent contractor – “an individual who independently has made the decision to go into business for himself or herself’” and establishes and promotes the independent business by such things as incorporating, getting a business license, and advertising.

If I had to lay the blame, today it would lie squarely upon the shoulders of Labor. For years, NAMFS members have played a game that finally came home to roost — that game was misclassifying employees. And Labor has played into their hand just like a #WalMartGreeter on a Rascal to pick up their paycheck. I mean everyone has skeletons in their closet — NAMFS members have mass graves. Be that as it may, Labor has never had to make a public withholding that they are truly independent. Here, let me break this down in a way that only a trained media professional such as myself is capable of doing,

When Labor begins working for NAMFS members it is like showing up to work as an employee. First, NAMFS members provide all Clients to Labor. NAMFS members provide all manuals for providing services to they for Labor. Then NAMFS members provide all the training to Labor. NAMFS members provide the software technology to move their product from Labor to Client. And NAMFS members have lost every lawsuit filed against them in a pre and post Dynamex environment in the State of California, pertaining to employee misclassification, going back to the Hurst Decision in 2010.

To recap, NAMFS members tell their alleged independent contractors cum misclassified employees where to go, when to go, what to do, when to do it, and how much they will be paid.

That’s right. You see, never has anyone been able to submit their own bid! Anyone providing services in the Industry are mandated to submit a bid using software provided and then, in many cases, that bid requires MANDATORY DISCOUNTING! Whether we are talking about the hundreds of thousands of dollars to settle the Hurst v Buczek litigation; the millions of dollars which Caroline Reaves paid to settle the Vinson v AMS – MCS litigation; the millions of dollars in federal jury verdicts in 7 out of over one hundred pending cases in the Bowerman v FAS – Assurant litigation which is now Nationstar’s headache, vis-à-vis Xome, when they purchased Assurant Field Asset Services; or the latest litigation involving former Lender Processing Services, now ServiceLink, in San Diego County cited as Collins v ServiceLink Field Services, et al.

And while our Industry is the smaller end of the spectrum, the reality is that the spotlight is now being shined upon the lack of regulatory oversight present in it. Oh, Eric Miller, NAMFS Executive Director, is always happy to point out another demand that NAMFS membership are rolling out for their misclassified employees to abide by. The reality, though, is that there is zero oversight in an Industry which moves trillions of dollars in distressed assets in and out of foreclosure each and every year. The recent litigation in the Involuntary Bankruptcy of Shari Nott and Jack Jaffa, co-owners of National Maintenance and Preservation Services dba National Field Network (NFN) paints a very dark picture of how the Industry has operated.

No matter how you look at it, things are bad and only going to get worse for both Management and Labor within the Mortgage Field Services Industry. NAMFS has exacerbated the problem by hosting lawyers like Ruth Bogatyrow Kraft to parade Power Point slides encouraging NAMFS members to circumvent, rather than obey the letter of the law, through tactics like mandatory arbitration. Kyle Nickles, a former NAMFS Board Member, invited Kraft to the NAMFS #FraudFest 2017; however, due to scheduling and weather issues, it was a no go. Kraft appeared at the NAMFS #FraudFest 2018, to present what was clearly spelled out in Slide 17 (above) of Kraft’s Presentation titled FLYING BELOW THE RADAR. It is interesting as Counselor Kraft was also a Judge. I bring this up as Judges are never imprecise in their language as it is literally the difference between life and death in many cases.

Now, Counselor Kraft could have chosen a plethora of words to put on that slide and she chose not to. FLYING BELOW THE RADAR. Let that sink in for just a moment. For a woman whom has claims to multiple accolades such as Ethics Awards and The Woman’s Zionist Organization as a member of the Board of Directors of Yashar, the Judges’ and Lawyers’ Chapter of Hadassah, one would think that protecting the civil rights of the disenfranchised might have appeared just a wee bit higher on her proverbial radar — no pun intended. It didn’t. And it is my opinion that Kraft knew if she presented information contrary to that which her audience desired to hear, she would lose a potentially large and lucrative pool of prospective Clients. What Kraft or Nickles truly chose to accomplish on that fateful day is known only to they. What we have, though, are the words which were memorialized by the Honorable Ruth Kraft and viewed at the NAMFS #FraudFest 2018.

A simple Google Search by the Honorable Ruth Kraft would have revealed that NAMFS members have a systemic problem which runs far deeper than simply employee misclassification. This is not an excoriation of Kraft; this is merely an inquiry into why my learned colleagues are so willing to sell their good name and reputation for a few Club crackers and their name in neon lights.

We reached out to Counselor Kraft for contribution to this article; however, none was forthcoming at the time of publication. Kyle Nickles, former owner of NY Field Services and current owner of JK Field Services had this to say,

I think you are reading into that document a little bit.  I was in the room during her presentation and even though I do not have a perfect memory I don’t remember getting the impression that she was trying to circumvent the law in any way. — Kyle Nickles, 12 November 2018

It is hard to compete in an Industry which monetarily supports and rewards moral hazard. And it is even harder to find those whom even want to operate in a legal environment when that means a reduction in profit margins. The International Association of Field Service Technicians (IAFST) is striving to both bring in the long needed legal apparatus in order to ensure that the future profits are not offset by proposals like those of Kraft’s which may eventually cost even more than their origination. In fact, long before Kraft dipped her toes into the quagmire of employee misclassification within the Industry, the IAFST was working with Management and Labor to LEGALLY solve the issues. Here is one of their White Papers which address the issues which our Industry and others such as Realtors, are dealing with today,

Innovation is the tip of the spear with which the IAFST has been cleaning the Industry with. Take for example the No Collateral, Unsecured Loan Program which partners Industry professionals with up to One Million Dollars in 96 hours or less. Or look no further than the IAFST working with HUD on increasing pricing upon the Mortgagee Letter (ML) to ensure that both Management and Labor are capable of complying with the Service Contract Act (SCA). Joining the IAFST is as simple as clicking the link below,

Join The IAFST Now!

If you like being on the cutting edge of innovation, the IAFST is for you. Otherwise, there is always NAMFS and Ruth Kraft.

Editor’s Note: Altisource was just sued in federal court for employee misclassification under Dynamex.

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