Plaintiff David Gasman filed the suit in the US District Court for the Southern District of New York and immediately sought class-action status to be able to also represent other Morgan Stanley brokers, the Associated Press said.
“The labor law both on the state and federal level is extremely clear in providing basis for the claims in the case,” said attorney Max Folkenflik, who is representing Gasman, according to the news report. “The surprising thing is Morgan Stanley and the securities industry, in general, has ignored the requirements of the law.”
The lawsuit claims that Gasman and others similarly situated regularly worked overtime at the firm and weren’t paid at the overtime rate despite overtime requirements in bothEmpire State and federal labor laws. The lawsuit says Gasman regularly worked 45 hours to 50 hours a week at the firm and was paid on a commission basis without a premium for overtime.
The complaint also claims that Morgan Stanley made a number of unlawful deductions from the wages of Gasman and other brokers, including
- the deduction of wages paid to “cold callers” hired to obtain business for the firm
- deductions for the pay of a broker’s secretary or sales assistants
- deductions for “broken trades,” where a customer challenges a transaction and the trade is cancelled.
Last month, Merrill Lynch & Co. agreed to pay as much as $37 million to settle a lawsuit claiming its brokers in California should have been paid overtime. The case was brought on behalf of about 3,000 brokers who worked for Merrill in California between 2001 and 2004 (See Merrill Signs on to Broker OT Pact ).