A Kansas Federal Judge recently approved a $73 million class action settlement to resolve a court battle between Bank of America and 185,000 BoA workers who had been doing work “off the clock,” in violation of the Fair Labor Standards Act (FLSA) and federal and state wage and hour laws.
240 workers had opted into the class; approximately 185,000 other hourly workers will receive at least $20, per the deal. These eligible employees include call center workers, retail bankers, and other hourly employees who worked for BoA from October 2006 until the present. Judge John Lungstrum, a U.S. District Judge in Kansas, consolidated multiple legal actions against BoA in 2013, when the class action was created.
The Roots of BoA’s Wage and Hour Problems
Plaintiffs said that BoA had a corporate-wide policy of forcing workers to do labor while “off the clock.” As per the Fair Labor Standards Act (FLSA), “off the clock” work is technically understood as “time spent doing work not requested by the employer, but still allowed.” Federal law mandates that businesses must pay workers for this time and effort. The plaintiffs argued that the Bank of America had a miserly labor budget and tried to compensate for lack of funds by managing overtime very aggressively.
The $73 million settlement fund will be apportioned as follows:
• Attorney’s fees and legal costs;
• California Labor Workforce Development Agency (money will help settle the claims);
• Some money will be paid to administer the settlement;
• Some money will be put towards payroll taxes, incentive payments and service awards;
• All class members will be compensated based on what’s known as the “Net Settlement Fund” (as opposed to the “Gross Settlement Fund”), per a system of points that will be determined by assessing each worker’s hourly rate, time worked, and other technical adjustments.
Bank of America’s Big Settlement in Context
The case illustrates the power of FLSA class actions to do several things:
• Hold large powerful institutions (such as one of the country’s biggest banks) to account for trying to “nickel and dime” its laborers, who otherwise would have been powerless to do anything about the forced off the clock work;
• Consolidate diverse litigation across the country;
• Send a message to other would-be FLSA and wage and hour violators that bad employment practices will not be tolerated.
For help understanding your rights under the FLSA or New York Labor Laws, call the Joseph & Kirschenbaum legal team today at (212) 688-5640, or email us for information at email@example.com.