Morgan Stanley & Co. has agreed to pay $4.2 million to settle a collective action accusing the financial services company of failing to provide overtime pay to client services associates. Phillips Amador, a former client services associate, filed the suit in 2011. He alleged that Morgan Stanley failed to provide associates with overtime in violation of both the Fair Labor Standards Act (FLSA) and state labor law. It was contended that even though Morgan Stanley classified the employees as nonexempt from overtime requirements, the financial company told them not to record the overtime hours they worked. U.S. District Judge Richard J. Sullivan had conditionally certified the FLSA collective action, finding the Plaintiffs had adequately claimed they were subject to an unlawful overtime policy.
The settlement came as Morgan Stanley was battling a consolidated action accusing the company of failing to pay overtime to financial advisers and financial adviser trainees and taking unlawful deductions. In May, the judge overseeing that case reduced the scope of that by dismissing a claim related to its alleged failure to reimburse certain business expenses.
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