Wage and Hour Suits Bedevil Firms

Just as Salomon Smith Barney was in the final stages of paying out claims on a wage-and-hour suit settled last August, the firm got hit again.The new lawsuit, filed in the U.S. District Court in Tampa, Fla., on May 5 by sales assistant Arleen Doran (who is still employed at SSB's downtown Tampa branch), alleges Doran was paid overtime but at the wrong rate. The suit is seeking collective action status.According

Just as Salomon Smith Barney was in the final stages of paying out claims on a wage-and-hour suit settled last August, the firm got hit again.

The new lawsuit, filed in the U.S. District Court in Tampa, Fla., on May 5 by sales assistant Arleen Doran (who is still employed at SSB's downtown Tampa branch), alleges Doran was paid overtime but at the wrong rate. The suit is seeking collective action status.

According to court papers, Doran was hired by SSB in July 1998 at a salary of $42,000. Of that, only $24,475 was paid by the branch, which was the amount used by the firm in incorrectly calculating an overtime rate of $17.65 per hour, instead of the correct amount of $30.29 based on her total compensation, the claim says.

Her lawyer, Jonathan Alpert of the law firm of Alpert Barker & Rodems of Tampa, says he believes that the same incorrect method of calculating overtime is used throughout SSB.

The first collective action against SSB, Jean Reynolds v. Smith Barney, charged that the firm simply failed to pay overtime to its sales assistants in violation of the federal Fair Labor Standards Act of 1938, which mandates time-and-a-half to hourly workers who put in more than 40 hours a week.

An SSB spokesperson would not comment on the case.

Alpert has previously settled overtime complaints against Prudential Securities, PaineWebber, Sutro and Raymond James Financial.

Another prospective collective action against Merrill Lynch for unpaid overtime--the Tina Tucker case, filed in the U.S. District Court in Tampa on June 10, 1998--was scheduled for a status conference last month. Tucker's lawyer, Tom Grady of Naples, Fla., hopes to file the petition for certification as a collective action sometime this summer.

In her complaint, Tucker charges that it was an "unwritten rule" at Merrill that sales assistants "were to record on their time sheets no more than seven hours worked per day, even if they worked hours substantially in excess of this amount."

A Merrill spokesperson denies Tucker's allegations.

But Grady says he's heard from a total of 24 women who would be willing to opt into the action once certified. Of those, 13 are current employees, he says, adding that he's heard from women in New York, Ohio and Pennsylvania.

Another action for unpaid overtime was filed in federal court in Denver in March 1996 against Morgan Stanley Dean Witter. The case is still a "local case, limited to three women," says the plaintiffs' attorney, Kathleen Mullen. Mullen is seeking collective-action status for unpaid overtime and also for discrimination. Unpaid overtime has a disparate impact on women, the suit says. At press time, the case was awaiting a discovery ruling by the judge.

As of April 23, Salomon Smith Barney had finished mailing out the first round of overtime checks to its sales assistants as stipulated in the final judgment in the Jean Reynolds v. Smith Barney case.

Under the settlement, every sales assistant employed by Smith Barney over the three years prior to August 1998 was guaranteed a check ranging from $40 to $2,000 based on length of service, with lead plaintiff Reynolds getting $3,500. The checks carried with them an explanation that cashing the check meant that the person was opting into the collective action and could follow up with a supplemental claim if he or she felt that the firm owed more money.

Most of the checks have been cashed, according to a court report. If all the money was accepted, the price tag to SSB for the initial payments would be $2.1 million. Under the settlement, the total bill can ultimately run to $8 million.

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