B of A to Settle Suits on Employee Overtime

Bank of America agreed Friday to pay $22 million to settle four lawsuits accusing the company of cheating thousands of personal bankers out of overtime.

The agreement is the latest in a string of victories for white-collar workers who have sued retailers, restaurants, insurers and other employers to recover pay they say they are owed for working long hours on straight salaries.

In July, an Oakland jury awarded a record $90 million to 2,400 claims adjusters at Los Angeles-based Farmers Insurance Exchange. Farmers is appealing the decision, one of the only jury verdicts in a white-collar overtime case in California.

Other companies have settled, including Rite Aid Corp., which agreed in June to pay $25 million to 3,000 drugstore managers and assistant managers. In 1997, Pacific Bell settled with 600 sales support managers for $27.8 million.

In the Bank of America case, as many as 6,000 personal bankers at California outlets since July 1997 could be eligible for a piece of the settlement, said Bruce N. Anticouni, the lead attorney for the plaintiffs. Personal bankers provide individual attention and financial advice to a bank’s most affluent customers.

The payouts could range from a small amount to as much as $20,000, depending on how many current and former employees avail themselves of the settlement and how long they worked for the bank, the Santa Barbara-based lawyer said. The settlement must be finalized by a Los Angeles judge.

The Charlotte, N.C.-based bank denied any wrongdoing.

At issue was whether the personal bankers spent at least half their time in a professional or managerial role, which would make them exempt from the state’s overtime pay mandate.

“The bank perceived a personal banker as someone who would give individual attention to a bank customer regarding their banking and financial needs,” Anticouni said. “We didn’t dispute that they were involved in day-to-day contact with bank customers, but they were given a great deal of direction as to who they were to contact and what they were to say. Essentially, we believe that they were salespeople.”

David Lewin, the Neil H. Jacoby chair in management at UCLA’s Anderson School, said the Bank of America case is much less clear than cases concerning retail trade, restaurants and supermarkets. “Nevertheless, you can assume suits against other banks will be coming down the line,” he said.

Hundreds of similar lawsuits already are pending against employers in California, where overtime laws are strictly drawn.

“Employers have to take a very close look at just who they consider exempt and nonexempt [from overtime pay],” said Jim Kuns, a senior staff consultant for Employers Group, which represents 5,000 California employers. “A lot of companies take their clue from corporate headquarters back East, [which] don’t have the same rules we do here,” Kuns said.

Workers in California are entitled to premium pay for working more than eight hours a day. Managers, professionals and administrators are exempt from such requirements as long as they spend at least 50% of their time on managerial or professional work.

“When you call somebody a personal banker, the implication is they are really an independent professional with clients, providing specialized non-routine services,” said Lewin, who has served as an expert witness in several overtime cases. “It’s kind of a highfalutin notion, when in fact they may be doing routine things that an assistant to a bank manager might do.”

In many cases, employers wage a legal battle over whether an overtime lawsuit by a few white-collar workers should be broadened to include hundreds or thousands of employees with similar titles and jobs.

Once judges grant class-action status, substantially raising the potential costs, many employers move to settle to avoid litigation expenses and the uncertainty of jury decisions.

In Bank of America’s case, the bank and the personal bankers began mediation of the dispute before the issue of whether the employees qualified as a class was addressed.