Former Client Associates File Overtime Pay Suit Against Merrill
(Corrects details of plaintiffs’ claims in last three paragraphs.)
Four former Merrill Lynch client associates filed a federal class-action lawsuit against Bank of America and Merrill Lynch on Wednesday unpaid overtime wages, but one prominent advocate for associates says advisors who hired them also are responsible.
The suit, which seeks class status for more than 100 current or former associates employed since July 2013, estimates damages, attorney’s’ fees and costs at more than $5 million. Filed by former New York, Michigan and Florida client associates in the Eastern District of New York, the federal lawsuit alleges that Merrill violated the Fair Labor Standards Act by failing to compensate them for overtime beyond the 40-hour workweek.
Merrill in 2013 settled a similar suit from associates who worked at the brokerage firm from 2010 to 2012 for $12 million.
Sales associates are vulnerable to compensation abuses because of the curious securities industry infrastructure where brokers have such huge sway over assistants while at the same time are so tightly controlled by their firms, said Linda Friedman, a partner at the Chicago firm Stowell & Friedman that brought the 2013 case.
It is traditional in the brokerage industry for financial advisors to pay 70% or more of salaries, benefits and related compensation to associates, giving them considerable autonomy in day-to-day work assignments.
“I have not seen any other industry where the employer gets away with forcing its employees to pay a portion of the administrative support in order to reach a fair market wage for the administrative support,” she wrote in an email. “I’ve had women who made over $100K get a drop back to $28,000 when their FAs retired or left the firm.”
The CA often gets squeezed between the broker who imposes duties ranging from “cleaning mold out of the bottom of coffee cups to executing trades,” and the firm, she wrote.
“It seemed to me that Bank of America wanted to pay the overtime but…on the local level the FAs did not want a charge-back from the firm,” Stowell said of her earlier settlement. “The CAs work as hard as the FAs, and often with little compensation or gratitude.“
A spokesman for Merrill Lynch declined to comment.
The “copycat” suit filed this week indicates that fair pay for client associates remains a challenge, according to Friedman.
It was filed by New York law firms Outten & Golden, Shulman Kessler and Boca Raton-based Shavitz Law Group on behalf of former Merrill CAs Stacy Niemiec, Dawn Bradford, Nicole Curtis and Dana Brandes.
Niemiec regularly worked 60 hours a week at Merrill’s Bloomfield Hills, Michigan, branch from April 2014 to April 2015, according to the lawsuit. Brandes, who left Merrill’s Hewlett, New York, office in January 2013 after over three years with the firm, worked through lunch as a matter of course as part of her 43-hour workweek, it said.
Bradford logged in 48-to-55-hour workweeks during her employment at Merrill’s Melbourne, Florida, office from October 2008 to December 2013, a figure that includes about an hour every other day working from home, the lawsuit says.
Curtis, who regularly worked more than 40 hours without overtime pay at Merrill’s Peoria, Ill., branch from 2011 until she resigned this month, believes that her hours spent studying for licensing exams should have been compensated, according to the complaint.