I always wondered how Texas’ largest property tax protest company, with 200,000 customers, could give homeowners and businesses who hired it the personal attention their cases require.
Now, after the company lost a federal lawsuit last month, court records provide an answer.
For many years it did not offer a personal touch to its clients. Even with changes made, I don’t think it can today.
To find the answer a few years ago, I offered myself as a guinea pig and hired O’Connor & Associates of Houston as my property tax consultant to see how well the company did its job in the aftermath of its serious legal troubles.
Back in 2010, owner Patrick O’Connor had gotten crosswise with the Texas attorney general over O’Connor’s business practices. His company had paid an $800,000 settlement.
For my case, O’Connor went weeks without notifying me about the results of my protest. Patrick O’Connor later personally apologized.
As property owners struggle now to decide whether to protest and whether to do it themselves or hire a pro to do it for them, the O’Connor story is a cautionary tale. What happens when your company becomes part of a factory-like machine, yet still promises individual attention to customers?
Caught in the crossfire between O’Connor’s attempt to keep labor costs down and customers seeking protest help were the workers who handled cases.
Eleven former employees sued for unpaid overtime nine years ago, but their case, presented by Houston lawyer David M. Minces, was about more than a paycheck. Their working conditions were abysmal, court records show.
These property tax consultants were seasonal employees, working only several months during the spring and summer protest season. They received no overtime yet worked 60 to 90 hours a week to keep up with the workload, court records show. They received no sick days or health insurance.
Each PTC, as property tax consultants are called, was responsible for 65 case files a day. Each case file could run between 50 and 100 pages. That meant PTCs were required to study 3,000 to 6,500 pages each night to keep up, court records show.
A one-day stack of files could be 4 feet high, according to court records.
During the daytime, the part-timers visited appraisal district offices to handle cases. They tried to catch up on file work at night and on weekends, according to testimony.
“They joked they were trained monkeys,” lawyer Mince says.
Patrick O’Connor told me in an interview that conditions were not nearly as bad as trial evidence showed. In recent years, he said, he’s made changes to the company’s operations.
He said his company now operates “well within the bright lines of the law. … It is not a close call.”
Now PTCs’ hours are recorded. They must clock in and clock out, he said. More than a 40-hour workweek requires manager approval.
Help from abroad
With about a half dozen part-time PTCs this year, plus three times as many full-time PTCs, how does the company handle 200,000 cases?
The answer lies in India, where the company runs Pathfinders Business Analysis. Pathfinders employs 240 workers, including programmers, data processors, call center employees and researchers who help prepare what O’Connor calls “automated evidence packages.”
The files are sent back to America for PTCs to study and present in protests.
Lawyer Minces says: “They could pay those folks a dollar an hour, and they do a bunch of data mining from India. They don’t have to pay the professional tax consultants to do it, so they could lop more files on them.”
O’Connor acknowledged in testimony that this setup for his PTCs did not allow time for in-depth analysis. He said a “relaxed pace” review of a file would take about 15 minutes, but a careful but faster file review should take only three to five minutes.
In our interview, he told me PTC’s are now urged to work 40 hours a week so no overtime is needed. When I asked how they could pull that off, he answered, “The smart consultant will get one or two files ahead” when discussing cases in an informal meeting with an appraiser or a formal hearing.
“There’s a lot of dead time” during those, he explained.
PTCs did not usually communicate with clients, court records show. One worker who sued, Monique Fraser, testified that of 10,000 cases she handled, she met with only four property owners.
Failure to comply with rules sometimes resulted in fines of $250 to $500 extracted from commissions, court records show.
“It was probably a mistake, with the benefit of hindsight,” O’Connor said of the fines. “But we were trying to do something short of terminating people.”
O’Connor fought the lawsuit for overtime pay by claiming that the PTCs were exempt from overtime because they managed client files on their own without supervision. A judge found otherwise, and the verdict was upheld on appeal.
In losing the court case last month, O’Connor paid $286,000 to former employees for overtime. Legal fees in the 9-year case, O’Connor’s responsibility, total another $1 million.
That’s got to hurt, considering how O’Connor strives to cut costs, especially when he makes money only if company efforts result in lowered appraisals.
Lawyer Minces says, “O’Connor & Associates has been getting rich by taking advantage of unsuspecting homeowners for decades while holding themselves out as some kind of modern-day Robin Hood.”
O’Connor acknowledged the significance of the lawsuit when he told me: “We’ve made the changes which would have avoided this [lawsuit]. We’re easily complying with the law right now.”