Financial Services Update

This past week Merrill Lynch agreed to pay $37 million to approximately 3,250 of its California brokers to settle claims in a lawsuit seeking overtime compensation under the FLSA, the California Labor Code and the California Unfair Competition Law. Although some have suggested that the settlement was based on peculiarities in California overtime law, which generally is more favorable to employees than federal law, the litigation and the settlement raise significant questions regarding how stockbrokers are paid and whether stockbrokers really may be exempt from payment of overtime under state and federal law. To address the ramifications of the Merrill Lynch settlement, Dorsey & Whitney is preparing a survey which will be sent to clients to better understand current practices. The responses will then be compiled and shared at a roundtable discussion next month. We will also prepare a white paper which will address the issue and provide insight to