Bank of America has agreed to settle a pair of lawsuits involving unpaid overtime for advisor trainees working in its Merrill Lynch wealth management arm.
Under the settlement, Merrill will pay $14 million to resolve the matter, including $10,000 to several named plaintiffs and lesser amounts to a handful of others.
In the initial complaint filed in March 2015, plaintiffs Andrew Blum of Florida and Zaq Harrison of Maryland alleged that Merrill "encouraged and required" advisor trainees to work in excess of 40 hours a week but did not pay them overtime.
The plaintiffs filed their class-action complaint on behalf of other trainees who had a similar experience in Merrill's Practice Management Development Program, which they alleged violated the federal Fair Labor Standards Act.
They argued that Bank of America and its Merrill Lynch subsidiary misclassified participants in that program as exempt from federal overtime pay requirements.
A spokeswoman for Merrill Lynch did not immediately respond to a request for comment on the case.
The complaint describes a "centralized, company-wide policy, pattern and/or practice" set in the firm's New York headquarters that denied salaried advisor trainees overtime, even when 10-hour days or longer were the norm and trainees were expected to attend work functions on evenings and weekends.
The case highlights the strains that incoming advisors face when they are setting out to build a book of business. The complaint describes the duties of the plaintiffs as "inside sales and customer service," and alleges that they had "little or no independent discretion and judgment in performing" those tasks.
"Development Stage Trainees are expected to engage primarily in lead-generation activities," the complaint reads, saying that the plaintiffs routinely were required to log extra hours in identifying, qualifying, calling and holding appointments with potential clients.
The parties are asking Judge George Daniels of the U.S. District Court in New York's Southern District for one-third of the $14 million payout to go to the plaintiffs' attorneys, plus another $80,000 in costs and expenses.
Register or login for access to this item and much more
All On Wall Street content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access