Morgan Stanley Advisers Launch $5M OT Class Action

Law360 Kurt Orzeck
December 22, 2014

Financial advisers at Morgan Stanley & Co. LLC slapped the bank with a $5 million putative class action in California federal court Friday, accusing it of stiffing workers out of overtime pay and meal and rest breaks during a five- to six-month training period.

The complaint claims Morgan Stanley violated California state wage and hour laws and the California Business & Professions Code by telling the financial adviser associates to only record eight hours every day, even if they worked more, and by not giving them a method to accurately record the hours they actually worked.

Lead plaintiff and former FAA Jason Zajonc is seeking to represent at least 100 FAAs and current and former employees holding similar positions at Morgan Stanley from Dec. 19, 2010, through the resolution of the action.

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In willful disregard of state wage and hour law, Morgan Stanley has refused to timely pay plaintiff and all other similarly situated FAAs for all hours worked and has failed to provide overtime premium pay, ” the proposed class action says. Moreover, Morgan Stanley has willfully failed to provide mandatory meal and rest periods, and furnish itemized wage statements. ”

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In February, a Florida federal judge granted conditional certification to a class of all current and former pre-production FAAs who work or worked for Morgan Stanley in the three years preceding the judge’s order. He said they had sufficiently demonstrated that they were subject to a common policy of being denied overtime by the bank and also met the burden of being similarly situated to one another.

Zajonc allegedly worked at a Morgan Stanley branch in San Rafael, California, from roughly June 2012 to October 2012. He claims he worked more than 40 hours in all or most of the weeks he was in training.

The FAAs, classified as non-exempt during the training, are required to complete various courses and exams intended to teach them about the bank’s product and service offerings, research tools, policies and procedures, according to the proposed class action.

The suit seeks certification of the claims as a class action, designation of Zajonc as class representative and a declaratory judgment that Morgan Stanley’s alleged practices are unlawful under California state laws. It also requests equitable and injunctive relief including but not limited to an order blocking the bank from continuing the alleged practices, along with damages, prejudgment interest, attorneys’ fees and court costs, and additional relief.

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Plaintiffs and proposed class members are represented by Jahan C. Sagafi and Justin M. Swartz of Outten & Golden LLP, Gregg I. Shavitz, Susan H. Stern and Paolo C. Meireles of Shavitz Law Group PA and Seth R. Lesser and Fran L. Rudich of Klafter Olsen & Lesser LLP.

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The case is Jason Zajonc v. Morgan Stanley & Co. LLC et al., case number 3:14-cv-05563, in the U.S. District Court for the Northern District of California, San Francisco/Oakland Division.