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Judge approves BMO advisers’ overtime lawsuit

BMO Nesbitt Burns leads Canada’s investment banks in completed initial public offerings year-to-date as the heat from the real estate sector radiates through new issues.

Fred Lum/The Globe and Mail

Ontario's Superior Court of Justice has given the green light to a class-action lawsuit against part of Bank of Montreal's wealth management group that alleges the bank owes unpaid overtime to hundreds of current and former investment advisers.

The lawsuit alleges BMO Nesbitt Burns Inc. did not keep a proper record of the time employees worked and did not appropriately compensate employees when they worked overtime.

The case follows other lawsuits over unpaid overtime brought against Canadian Imperial Bank of Commerce and the Bank of Nova Scotia by bank tellers and other employees who say they have been unfairly denied overtime pay.

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The lead plaintiff in the BMO suit is Yegal Rosen, a former investment adviser who alleges he worked 60 to 80 hours a week between 2002 and 2006 but was never paid overtime. In his statement of claim, he said the bank fostered an environment where advisers were encouraged to work long hours. Based on Mr. Rosen's best estimate, his claim could reach $80,000. Mr. Rosen could not be reached for comment.

"We don't agree with the court's decision that this matter should be certified as a class action. We are seeking leave to appeal the decision," said Ralph Marranca, a spokesman for the bank, in a statement. "BMO Nesbitt Burns has a process in place that deals fairly with overtime compensation for our employees."

The class action could cover as many as 1,500 current and former investment advisers, associates and staff in training who are, or were, employed at the bank between 2002 and today, according to a press release from the plaintiff's lawyers.

"For many years employees just accepted what they were told by their employer they were, or were not entitled to," said lawyer Jonathan Ptak, a partner at Koskie Minsky LLP who is representing the plaintif. "And now there's a trend that people are beginning to challenge that."

BMO Nesbitt Burns denies that the advisers have a claim on overtime pay because the nature of their work is somewhat autonomous and compensation is paid by commission, rather than by hours worked. The bank has always excluded them from overtime policies.

In his reasons for certifying the action, Justice Edward Belobaba said that under Ontario's Employment Standards Act, even commission-paid employees are entitled to overtime, and that employment standard cannot be contractually waived.

For most employees in Ontario, overtime pay is due after 44 hours of work. Other provinces have different rules, but most stipulate an overtime rate equal to one and a half times the regular rate of pay. Companies cannot refuse to pay overtime rates. But some categories of workers are excluded from the regulations, such as oil field workers, professionals and some sales staff.

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The allegations against BMO Nesbitt Burns have not been proven in court. Certification allows the lawsuit to proceed to a trial.

The original lawsuit was filed in February 2010 and came on the heels of several other banking sector unpaid overtime cases in Canada and the United States.

In March, two lawsuits filed on behalf of thousands of CIBC and Scotiabank employees were cleared to go ahead after the Supreme Court of Canada said it would not hear the banks' appeals.

The banks maintain that their policies have been applied fairly and that overtime is paid to those employees who are eligible.

Together, the two cases represent $950-million in demands for unpaid overtime. When the cases were launched several years ago, lawyers told The Globe and Mail that more cases could follow because employers had been watching the issue.

But the BMO Nesbitt Burns case is unique in the banking sector because it is the first such case to be certified, said Mr. Ptak, the plaintiff's lawyer. He said the company has taken the position that the employees are not entitled to overtime because of their position and because they are paid by commission. The suit argues that the employees should have been classified as eligible for overtime. That would require advisers to prove both that they were eligible for overtime, and what the value of the overtime worked was.

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Editor's note: This story contains a clarification. An earlier version said the suit against BMO Nesbitt Burns was the first to deal with how employees are classified. In fact, it is the first such class-action lawsuit to be certified.

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About the Author
Financial Services Reporter

Jacqueline Nelson is a financial services reporter at the Report on Business. Prior to that she was a staff writer at Canadian Business magazine, covering news and writing features on a wide variety of subjects. More


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