NEW YORK — To settle claims that it violated the Fair Labor Standards Act (FLSA), Bank of America and its subsidiary Merrill Lynch have entered into a preliminary agreement with the financial adviser trainees that filed an overtime suit against the company. The plaintiffs were part of a five-stage training program to become full financial advisers with the company. They filed suit claiming that they were wrongly classified as exempt from overtime, and sought to represent trainees who went through the second stage of the program, which lasted ninety days and involved generating leads on clients. The parties have not yet disclosed the amount of the settlement as they will still have to submit it to the court along with a motion for settlement approval. The parties agreed to the terms after a third mediation session.
Misclassification as Exempt from Overtime
The plaintiffs claimed that during the second phase of the training program, they were encouraged and required to work more than forty hours per week. However, they were not paid overtime because the company considered them as exempt because they were “outside salespeople” under FLSA. Additionally, the defendants claimed that the experiences of trainees in this second phase varied widely and, therefore, the court should not have granted class certification. However, the court disagreed and granted class certification because the second-stage trainees had the same general duties, followed the same training manual, and were compensated based on the same system.
The defendants claimed that the financial adviser trainees clearly qualified as “outside salespeople” and therefore were exempt from FLSA. However, the plaintiffs alleged that they were encouraged and required to work more than 40 hours per week during the second stage of the training program, referred to as the development stage, but were wrongly classified as exempt from overtime. While the banks argued that the experiences of development-stage trainees varied widely, the plaintiffs responded that all development-stage trainees had the same general duties, followed the same training manual, and were compensated based on the same system.
Exemption for Outside Sales Employees
FLSA requires that employees be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. However, FLSA provides an exemption from minimum wage and overtime requirements for outside sales employees. To qualify, the employee’s primary duty must be making sales, or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer, and the employee must be customarily and regularly engaged away from the employer’s place or places of business.
Sales includes any sale, exchange, contract to sell, consignment for sales, shipment for sale, or other disposition. In order to qualify, sales must be the principal, main, major, or most important duty that the employee performs. Determining whether sales is the primary duty of an employee is based on all the facts in a particular case, which the emphasis on the character of the employee’s job as a whole.
If you or someone you know is misclassified as exempt from FLSA’s overtime requirements, you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.