A federal judge yesterday denied a request by Merrill Lynch and Bank of America to force a group of bank brokers to arbitrate a lawsuit seeking overtime pay.
The relevant laws and interpretations by the Securities and Exchange Commission each reject [Merrill’s and Bank of America’s] contention that arbitration should be compelled at this stage of the litigation, ” wrote judge Harold Baer of the U.S. District Court of the Southern District of New York in denying the firms’ request.
Merrill and Bank of America sought to move the case into the arbitration system run by the Financial Industry Regulatory Authority Inc.
But Finra rules explicitly prohibit the enforcement of arbitration agreements against a member of [a continuing] putative class or collective action, ” Mr. Baer wrote.
The case, filed last March, alleges that the bank brokers, called financial solutions advisers, are not exempt from labor laws that require overtime pay for nonmanagerial employees.
The suit seeks back pay for more than 100 members of the proposed class, and estimates that damages would exceed $5 million.
Two brokers in New York and one in California are the named plaintiffs so far.
The court’s decision keeps the case alive, said Jennifer Liu, a lawyer at Outten & Golden LLP, who represents the plaintiffs. Plaintiffs in other states could be added, Ms. Liu said.
The next step is to seek collective-action certification ” so that more bank brokers could opt in, Ms. Liu said, and then seek class action status to cover all eligible brokers who do not opt out of the case.
* * *