Senior HUD Official Mandates Dynamex Compliance

As Guardian Asset Management Refuses To Comply With Dynamex, IAFST Steps Up To The Plate

As California Assembly Bill 5 nears passage in the Senate, many have been requesting assistance from Foreclosurepedia with respect to Dynamex and its application upon employee misclassification. It is a foregone conclusion whether or not the Mortgage Field Services Industry are misclassifying employees as independent contractors in California. Multiple federal settlements and federal jury verdicts established as much even before Dynamex was ruled upon by the California Supreme Court. Tens of millions of dollars were paid and even the State of California fined Industry firms for employee misclassification. And yet the Industry refused to do anything. Leading the charge to violate the law is the National Association of Mortgage Field Services (NAMFS).  As early as 2010, Eric Miller, the NAMFS Executive Director, was aware that NAMFS membership were misclassifying employees. In a landmark, six figure settlement, Brad Hurst sued Buczek Enterprises. And nine years later, the very same judge whom presided over that case, Judge Edward Chen, is presiding over the largest employee misclassification in history which pits Uber against its drivers.

Those with the most to lose have had the least to say about the rampant misclassification of employees.

At the forefront of the issue is whether or not contracts overseen by the US Department of Housing and Urban Development (HUD) will have to comport to both last year’s Supreme Court decision in Dynamex and the soon to be law with respect to AB-5. Guardian Asset Management (GAM) currently operates the HUD Management and Marketing (M&M) Field Service Manager (FSM) contracts within the State of California. Additionally, Guardian has received additional contracts in half a dozen other states. Some of these awards are being protested for the unilateral way in which Guardian obtained them.

Foreclosurepedia exclusively spoke with a Senior HUD Official yesterday whom had this to say about its Prime Vendors such as Guardian Asset Management,

While we’ve used exemptions in the past for a few limited scenarios, I don’t foresee that we would grant an exemption for Federal performance in this instance.  The FSMs are bound to state and local laws under the terms of their contract, so HUD would require them to recognize the state court decisions in performance of their FSM contracts.

Guardian Asset Management’s leadership have been extremely outspoken when it comes to supporting Minority Females and Labor. And without an exception, the entire C Level of Guardian reads like the former Asset Management Specialists (AMS) roll call. Ernie Stefkovic, the former owner and founder of Asset Management Specialists (AMS), is the Director of Strategic Initiatives at Guardian Asset Management. Jerry Mavellia, AMS’ former Chief Operating Officer is now the Chief Executive Officer at Guardian. Greg Matecki, AMS’ former Chief Financial Officer held the same position at Guardian through 2018. Dan Leader, former AMS C Level staffer and husband to Margarida Lopes – Leader, Guardian’s alleged owner, is now the Chief Operating Officer for Guardian. And Lopes-Leader, the listed owner of DGG Re Investments LLC dba Guardian Asset Management, has no visible role — not simply on Guardian’s website, but ANYWHERE on the Internet with respect to Guardian Asset Management.

Lopes – Leader touts that she “Manage[s] all day to day operations and business development for Guardian Asset Management” on her official LinkedIn profile, it is uncanny that she only has several endorsements and then only from her husband and two other people. It is almost as if she doesn’t even exist.

On The M Report’s BPO Guide 2017, Guardian makes the following claim,

Guardian is an SBA-certified HUBZone and 8(m), minority and woman-owned national property preservation, and inspection company.

Since 2015, Guardian has required its misclassified employees to utilize a software component operated by the faltering background check company Aspen Grove Solutions (AGS). For years, AGS has been under fire for its questionable background check application and the costs associated with them. Additionally, even some NAMFS members are opting out of AGS to perform their own background checks due to their lack of confidence in AGS. These expenses, as in all things Guardian does, are passed directly down to Labor. And if the past history of how each of Guardian’s C Level personnel treated Minority Females and Labor at AMS is a yardstick, it is doubtful that Guardian will willingly comply with the legal requirements set forth in the State of California. Many within the Foreclosurepedia Nation have questioned why we have not covered the federal aspect of Dynamex, in depth. Candidly, we were hopeful that firms like Guardian Asset Management might look at their policies and work towards conversations with Labor. As early as October, 2018, Foreclosurepedia began to address employee misclassification with Guardian. Initially, we looked at Guardian’s training of alleged subcontractors by and through Guardian University. Any other term may have been appropriate — Resources instead of University perhaps — but they were adamant about retaining the language. We spoke about the tens of millions of dollars in settlements and federal jury verdicts, even outside the scope of Dynamex, and it fell upon deaf ears. And when we brought up the fact that in the recent Jan-Pro decision, Dynamex was being made retroactive, Guardian still refused to address the matter. Jan-Pro is specifically serious in that it dealt with the cleaning of facilities AND it dealt with a franchisee setting which should have been a slam dunk.

The law firm Paul Hastings, had this to say with respect to the Jan-Pro decision,

On May 2, 2019, the Ninth Circuit ruled that the California Supreme Court’s recent decision in Dynamex Operations West v. Superior Court, 4 Cal. 5th 903 (2018) (“Dynamex”) applies retroactively. Vazquez v. Jan-Pro Franchising Int’l, Inc., 2019 U.S. App. LEXIS 13237 (9th Cir. May 2, 2019) (“Vazquez”). But the court did not stop there; it “provided guidance” to the district court on how to apply Dynamex’s ABC test in light of the record developed thus far.

In what could be called an advisory opinion, the court went on to provide its “observations and guidance” for how the district court should apply Dynamex on remand—particularly focusing on Part B of the ABC test, which it noted “may be the most susceptible to summary judgment on the record already developed.” Id. at *48. First, the court observed that “[other] courts have framed the [Part] B inquiry in several ways,” including (i) whether the work of the employee is necessary to or merely incidental to that of the hiring entity; (ii) whether the work of the employee is continuously performed for the hiring entity; and (iii) what business the hiring entity proclaims to be in. Id. at *49. Advising that “[a]ll of these formulations should be considered,” id., the court considered each mini-part in turn.

With respect to Part B(i), the Ninth Circuit described this inquiry as either a “common-sense observation” of the nature of the business (e.g., floor measurers are necessary to the business of a carpet retailer) or a consideration of “economic terms,” such as whether the business’s revenues were derived from or affected by the worker’s earnings. Id. at *49-51. The court noted that Jan-Pro received a percentage of revenue generated by the workers; thus, Jan-Pro was “actively and continuously profiting from the performance of those cleaning services as they are being performed,” and its business “ultimately depends on someone performing the cleaning. Id. at *51-52. The court contrasted these facts with a case involving taxicab operators who paid a flat fee to lease taxicab medallions. Id. at *50-51. Because the medallion lessor’s revenues were not affected by how much the taxicab drivers worked, the drivers were considered incidental to the operations of the lessors. Id.

For Part B(ii), the Ninth Circuit advised that the district court should consider “whether Jan-Pro’s business model relies on unit franchisees continuously performing cleaning services.” Id. at *53. As for Part B(iii), in determining the usual course of a hiring entity’s business, the Ninth Circuit observed that “courts [generally] consider how the business describes itself,” such as through websites and advertisements. Id. For Jan-Pro, the court noted that its website described itself as a “commercial cleaning company.” Id. Although Jan-Pro argued that it was in the business of “franchising,” rather than cleaning, the Ninth Circuit expressed skepticism regarding that argument. Id. at *54.

Of concern to Foreclosurepedia and the International Association of Field Service Technicians (IAFST) is whether or not a firm’s purposeful misclassification of employees will ultimately cause its collapse. In the case of Assurant Field Asset Services, the Two Million Dollars in federal jury verdicts in 7 of the 130+ cases yet unheard, played a role in their sale to Xome, a Nationstar subsidiary. Moreover, though, when either sales or collapses occur, Labor always shoulders the burden by not being paid in order to finance golden parachutes for C Level personnel.

If you currently perform services for ANYONE in the State of California, the IAFST would like to confidentially speak with you.

IAFST RECRUITMENT CENTER

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