In 2014, a Fair Labor Standards Act ("FLSA") case against Morgan Stanley & Co. LLC ("Morgan Stanley" or the "Company"), which alleged the Company was not paying its employees overtime, ended with a $4.2 million settlement. Subsequently, on June 30, 2016, after facing several identical lawsuits, Morgan Stanley agreed to pay-out another $6 million to settle those matters.
Specifically, the $6 million settlement resolved four collective actions that accused Morgan Stanley of violating the FLSA for not paying overtime to its financial adviser trainees. The original suit claimed that the Company practiced a de facto "off-the-clock" policy, despite having a written policy to pay overtime. In other words, the workplace culture of Morgan Stanley forced employees to work overtime, but they were not being compensated for that time.
Although class certification was still pending at the time, the parties agreed the settlement was fair when considering the claimed amount of unpaid overtime and the Company's defenses, including its assertion that it paid for time that trainees spent studying during training weeks to prevent them from studying off-the-clock.
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Kang, Y. Peter. "Morgan Stanley Pays $6M To End Financial Adviser OT Action." Law 360. Last modified on June 30, 2016.