Financial Advisers Win $2.7M Off Merrill Lynch
(CN) - Merrill Lynch can pay $2.7 million to settle claims that it delayed and withheld commissions owed to financial advisers, a federal judge ruled.
John LaBriola, as class representative, sued Bank of America and its wealth management division, Merrill Lynch, in 2011 over wages that he and others were allegedly not paid within 72 hours of resignations and firings.
LaBriola allegedly worked as a financial adviser in California for Merrill Lynch from 1998 to 2010, and did not timely receive his final wages as required by state labor law.
After a federal judge refused to dismiss or strike the claims, the parties entered mediation.
Their first attempt at a settlement did not stick, but Merrill Lynch agreed in an amended settlement last month to dole out $2.7 million to 275 plaintiff advisers, or about $10,000 per individual.
U.S. District Judge Claudia Wilken approved the preliminary agreement last week, noting it had "no obvious deficiencies" and was "fair and reasonable."
"Significant investigation, research, and litigation have been conducted such that counsel for the parties at this time are able to reasonably evaluate their respective positions," the six-page ruling states. "Settlement at this time will avoid substantial costs, delay and risks that would be presented by the further prosecution of the litigation. The proposed settlement has been reached as a result of serious, informed, and non-collusive negotiations between the parties."
The settlement covers former advisers whose employment from Merrill Lynch was terminated from Dec. 2, 2008, to Dec. 31, 2011. Specifically, advisers who resigned but did receive commissions for more than 72 hours or who were fired, but received commissions after their last day of employment.
Total payment under the proposed agreement is $2,785,000. Individual payments will be made on a claims-made basis.
Wilken also approved the Legal Aid Society-Employment Law Center, which operates workers' rights clinics throughout California, as a cy pres recipient in the lawsuit and stayed all unrelated proceedings.
"The parties agree that the terms and conditions of this settlement agreement are the result of lengthy, intensive arms-length negotiations between that parties and that this settlement agreement shall not be construed in favor of or against any of the parties by reason of their participation in the drafting of this settlement agreement," the 25-page proposal states.
James Quadra with Quadra & Coll, of San Francisco, represents LaBriola.
Michael Mandel with the Los Angeles firm McGuire Woods represents Merrill Lynch.
Wilken scheduled a motion for final approval for Oct. 17.