Financial services company Charles Schwab & Co. Inc. on Friday said that it had settled a proposed collective and class action in New York accusing it of failing to pay legally required overtime.
Plaintiffs Dana Aboud, William Hicks, Michael Porowski and Albert Schweizer brought the action last Wednesday in New York federal court on behalf of two collectives comprised of financial consultants and other employees accusing Charles Schwab of violating the Fair Labor Standards Act, and Aboud alone brought proposed class action claims accusing the company of violations of California wage and labor laws.
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One collective would have consisted of associate financial consultants, branch extension financial consultants, client development team financial consultants and international client development team financial consultants for Schwab, and the other would have consisted of active trader sales specialists for the company, according to the complaint.
Schwab had the plaintiffs work more than 40 hours per week during most weeks they were employed by the company without paying them overtime wages, because they were misclassified as employees exempt from overtime compensation, the complaint claims.
The plaintiffs claimed they were misclassified as exempt because their primary duties were "inside sales, production, customer service and clerical tasks," and claimed that Charles Schwab conducted no individual evaluation of their job duties to determine exemption status.
The two collective groups would have been comprised of certain types of financial consultants and active trader sales specialists. The plaintiffs allege in the complaint that Charles Schwab improperly classified them as exempt employees, unlawfully depriving them of overtime compensation, as well as encouraging them to work beyond their scheduled shifts without compensation.
Aboud's proposed class action claims accuse the company of misclassification of the class members he represents and failure to pay overtime; as well as failure to pay in a timely manner; failure to provide timely, accurate, itemized wage statements; and failure to offer 30-minute meal breaks and 10-minute rest breaks when required. Those actions are all violations of California's Unfair Competition Law, according to the complaint.
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Aboud worked as an associate financial consultant for Charles Schwab from April 2010 to April 2011, and his duties were primarily selling financial products to existing Charles Schwab brokerage and banking customers, according to the complaint. The other plaintiffs had different job titles but performed the same primary duties, the complaint said.
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The case is Aboud et al. v. Charles Schwab & Co. Inc., case number 1:14-cv-02712, in the U.S. District Court for the Southern District of New York.