In January, Smith Barney brokers may be the first to cash in on overtime lawsuits that have been all the rage over the last two years. A Northern District of California judge approved the allocation of $98 million in settlement money, as well as the schedule for carrying out the settlement.
Anyone employed by Citigroup Global Markets Inc. (CGMI) as an exempt financial advisor, financial advisor associate, financial consultant or financial consultant associate anywhere in the U.S or its territories during years that vary by state, are eligible to recover cash under the settlement. According to the class action settlement notice, Smith Barney advisors in New York who worked overtime hours between January 31, 2000 and January 1, 2007 can receive between $102 and $173 per month if they were working during that period (or up to a total of $14,532). New Jersey advisors can expect the same amount, but have a recovery period that starts in May 4, 2000 and ends January 1, 2007. In California, where there are generally more employee-friendly labor laws, Smith Barney reps can expect between $304 and $514 for each month worked between September 16, 2000 and January 1, 2007 (or up to a total of $39,064).
The notices were sent to class members in early September detailing the schedule of proceedings. Class members have until November 6 to file objections, postmark their claim forms or request to be excluded from the settlement. On November 13, a hearing will take place to consider any class members’ objections to the proceedings, and on January 10, 2008 a hearing will take place in an Oakland, Calif., court to get final approval on whether the settlement is “fair, reasonable, and adequate,” according to the notice. The class counsel will also ask the court to approve 25 percent of the settlement amount to be allocated for attorney fees, plus up to $25,000 for each of the 15 named plaintiffs.
In the notice, plaintiffs’ counsel urges the class to accept the settlement as is without objection. Because of the case’s “highly technical” nature, they say if it is tested in court it may be tied up for years or denied altogether. They point out that there is no reported court decision upholding reps’ right to overtime pay or re-imbursement of business expenses. And that, in fact, the Department of Labor recently stated that financial advisors are not entitled to overtime under federal law.