Merrill to Pay $14 Million in Overtime to Former Trainees
Raise a glass to worker’s rights, if you consider wirehouse brokers in training programs merely hourly workers. Or drink the whole bottle if the settlement that Merrill Lynch agreed to this week fuels your anger at lawyers drinking from the mass-litigation trough.
Bank of America and Merrill Lynch Pierce Fenner & Smith have agreed to pay $14 million to settle class-action lawsuits on behalf of some 9,500 former trainees who said they were cheated of overtime pay, according to documents filed in federal court in New York City on Tuesday.
In their complaints, trainees in Merrill’s PMD (Practice Management and Development) program accused the firm of violating the federal Fair Labor Standards Act by regularly requiring them to work 60 hours and more per week — and to put in more hours at client prospecting events and on weekends — without giving them overtime pay.
The settlement equates to around $1,000 per trainee, after legal fees, a lawyer for the plaintiffs told Reuters, which reported the settlement earlier on Wednesday. Lead plaintiffs and early opt-ins will receive significantly more. “Development-stage trainees” who were in the programs on or after August 5, 2011, are eligible for a settlement award, according to the settlement agreement.
A spokesman for Bank of America told Reuters that he would not comment on the settlement.
The lead plaintiffs in the suits, which were filed last March and April and were consolidated for purposes of the settlement, are not currently registered as brokers, according to the Financial Industry Regulatory Authority’s BrokerCheck database.
Litigation by trainees to collect overtime pay and to fight attempts by banks to selectively recoup training costs have escalated in recent years. Bank of America paid $7 million in 2014 to settle a class-action suit from brokers who worked in its bank branches.
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