Assistant Bank Managers’ Overtime Claims Consolidated

By Jeffrey Rhodes Oct 13, 2016
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Overtime claims by two sets of Chase Bank assistant branch managers should be consolidated in one collective action with a notice to all assistant branch managers, even ones bound by arbitration agreements, the U.S. District Court for the Southern District of New York ruled.

Chase Bank is the consumer and commercial banking arm of JP Morgan Chase & Co. and has more than 5,500 branches in the United States. Saju Varghese, a Chase assistant branch manager (ABM) in Nassau, N.Y., from May 2002 to October 2013, sued Chase, alleging unpaid overtime compensation. LeRoy Taylor, a Chase ABM in Chicago from February 2012 to December 2012, also filed a collective action against Chase with nine other ABMs from other locations claiming unpaid overtime compensation.

In both cases, the plaintiffs claimed that they frequently worked more than 40 hours per week without receiving overtime pay and that other Chase ABMs worked similar hours without overtime compensation. The plaintiffs claimed that they spent most of their time working as tellers but said they also performed clerical tasks such as greeting customers, opening and closing accounts, answering phone calls and customer questions, and counting money. The plaintiffs claimed that they had no authority to hire, fire, promote or set rates of pay for other employees and that Chase highly regulated the performance of their duties. They claimed that Chase distributed the same training materials to all ABMs and that they observed ABMs at other branches performing the same duties.

The plaintiffs filed a motion to consolidate the cases and to have a collective-action notice sent to all Chase ABMs across the country to allow them to join the suit. The Taylor plaintiffs also filed a motion for the court to stop the statute of limitations from running against potential opt-in ABMs from the date the motion was filed until the ABMs could choose to join the lawsuit.

Chase opposed consolidation, arguing that the overtime claim of each ABM had to be considered individually. Chase pointed out that Varghese testified at his deposition that his job duties were different from the job duties claimed by some of the Taylor plaintiffs. Varghese testified that he performed management duties that included hiring and disciplining tellers. Chase also noted that there were big differences in salary, as Varghese was paid $61,000 per year, while a Taylor plaintiff was paid $30,500 per year.

The court ruled that these differences were relatively trivial in light of the shared legal and factual nature of the claims and thus granted consolidation.

Regarding the collective-action notice, Chase argued that a strict standard applied prior to the sending of the notice and that Varghese was unable to identify any common proof concerning the compensation and job duties of other assistant managers. Chase also argued that notice should be transmitted only to assistant managers who worked at Chase branches where the plaintiffs worked and that notice should not be sent to ABMs subject to arbitration agreements.

The court rejected these arguments, finding that the plaintiffs satisfied the minimal burden necessary for notice to be sent based on their allegations. The court also found the existence of arbitration agreements to be irrelevant to approval of the notice because it was a factual issue to be considered later. The court noted that Chase could later seek to decertify the collective action if it could show major factual differences in the claims of opt-in plaintiffs. The court also required that Chase provide e-mail addresses and telephone numbers of potential plaintiffs for delivery of the collective-action notice.

Regarding stopping the statute of limitations for potential opt-in plaintiffs, Chase argued that the lawyers for Varghese and Taylor had caused unjustified delay that made suspending the statute of limitations unfair to Chase. The court disagreed and found that the delay was caused by the time it took for the court to consider the plaintiffs' motions. Thus, the court found that the statute of limitations should be suspended for potential opt-in plaintiffs as of the date the motion was served, which was Aug. 20, 2012.

Varghese v. JP Morgan Chase & Co., S.D.N.Y., No. 14 Civ.1718 (PGG) 15 Civ. 3023 (PGG) (Sept. 9, 2016).

Professional Pointer: While recent case law suggests that employers can sometimes prevent class actions using arbitration agreements, this does not hold true for overtime collective actions. A nationwide employer may be subject to nationwide overtime litigation that allows different employees with similar job titles and compensation arrangements to join the lawsuit.

Jeffrey Rhodes is an attorney with Doumar Martin in Arlington, Va.

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