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Friday, May 2, 2003 - Page updated at 12:00 AM

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Bank to write overtime checks: $4 million ends suit by staff working off clock

Seattle Times business reporter

Theresa Luciano earned more than $125,000 a year in salary and bonuses as a vice president for Bank of America in Seattle. She worked 50-hour weeks managing a banking portfolio of more than 300 clients, some of whom she entertained at restaurants and Mariners games.

Despite the hefty income and lofty title, Luciano, 34, said she wasn't really an executive but a saleswoman. Now she's entitled to $23,000 in unpaid overtime as part of a class action against the bank.

A King County Superior Court judge yesterday approved a $4.1 million settlement on behalf of Bank of America employees in Washington who said they were encouraged to work off the clock selling bank services.

The settlement covers overtime work from Feb. 1, 1999, through March 18, 2002, when the bank reclassified many positions, making them eligible for overtime.

The salaried employees may have held such titles as "client managers," but they weren't exempt from overtime rules, said Seattle attorney Gary Nece. His firm, Nece and Allen, filed the class-action suit in February 2002.

"These practices are common across the financial-services industry and in almost every service industry," Nece said. "Many people think that if they are salaried or are highly compensated, or have 'manager' in their job title, they aren't entitled to overtime pay. That's just not true."

The Charlotte, N.C.-based bank, which settled a similar case in California, admitted to no wrongdoing, saying it believes its employees were exempt because of the nature of their work.

But it did agree to pay as part of the settlement up to $2.6 million to 280 Washington employees to avoid a costly jury trial.

The average payout will be $9,200, yet several workers are entitled to back pay exceeding $20,000, Nece said. Luciano, who is getting $23,000 in back pay, Steven Manger and Sylvia See will get an additional $20,000 each for bringing the suit. Their lawyers will collect more than $1.2 million.

The case is the latest in a string of lawsuits involving workers who say their employers cheated them out of overtime pay.

Wal-Mart has been hit with more than three dozen overtime suits across the nation, including one filed by former cashiers in the Auburn and Lynnwood stores. The employees say the discount retailer forced them to work long hours off the clock.

Last spring, Starbucks settled an $18 million suit filed by store managers in California, a state that grants overtime to a broader group of workers than does federal law. The managers said that despite their titles, more than half of their time was spent performing routine coffee-bar duties, making them nonexempt employees.

RadioShack agreed in July to pay $29.9 million to settle a lawsuit on behalf of store managers in California. The workers argued they were owed overtime because the company made managerial decisions at higher levels and required them to spend most of their hours as salespeople.

Although most cases have involved the service industry, a mammoth judgment against Farmers Insurance Exchange may be spurring more lawsuits from white-collar workers.

In 2001, a California jury awarded $90 million to Farmers claims adjusters who said they'd worked overtime for years without being paid. The company is appealing.

State and federal wage laws require employees to be paid time and a half if they work more than 40 hours a week. Salaried workers are exempt if their job falls into one of three main categories: managerial (a supervisor), professional (doctor, lawyer, engineer) or administrative (often a support function, such as human-resources director).

Yet many modern workplaces have blurred the lines between staff and management, offering titles and job descriptions that don't fit neatly into a classification.

The confusion and the lawsuits have prompted the U.S. Department of Labor to work on updates to the Fair Labor Standards Act, enacted in 1938 to protect industrial workers from being exploited.

The proposed changes, expected to take effect either late this year or early 2004, would redefine and update job classifications, giving employers a clearer understanding of which jobs are exempt from overtime rules.

Information from The Associated Press is included in this story.

Shirleen Holt: 206-464-8316 or sholt@seattletimes.com

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