Merrill Lynch has decided to consolidate the numerous overtime lawsuits that have been filed against the firm and settle nationally with its brokers. It is the third securities firm to do so—earlier this year, both UBS and Smith Barney settled nationally with brokers in similar overtime lawsuits.
Merrill filed documents indicating its intention to settle in federal court yesterday. The amount of the settlement has not yet been disclosed. A Merrill spokesman confirmed the firm’s decision to settle: “We are pleased that this matter is resolved. We are confident that the manner in which we now pay our financial advisors is both lawful and competitive,” he said in an email.
Merrill had settled one overtime lawsuit previously, agreeing to dish out $37 million to brokers in the state of California in August 2005. The firm faced additional overtime cases in New York, New Jersey, Pennsylvania and Connecticut.
Since 2005, several Wall Street firms have settled overtime cases outside of court. In March, Morgan Stanley settled with about 5,000 brokers in California for $42.5 million. UBS and Smith Barney paid brokers nationwide $89 million and $98 million, respectively, to settle their overtime settlements. (Click here to read more about Wall Street’s overtime fight.) So far, very few of the overtime suits have made it to court—the firms have mostly agreed to settle before getting that far. But there is one exception.
Earlier this year, A.G. Edwards filed a motion for summary judgment in an attempt to throw out overtime-pay claims by two former brokers. But in July, a U.S. District Judge denied the motion, saying, “There were enough issues in dispute for the case to proceed.” Some say the decision gave plaintiffs’ lawyers an advantage in future overtime cases. (For more on the decision, click here.)