JP Morgan Chase Settles Unpaid Overtime Class Action Lawsuit for $3M

JP Morgan Chase & Co. will pay $3 million to settle a class action lawsuit claiming the company unlawfully failed to pay mortgage bankers for overtime.

Illinois federal judge Susan Cox approved the unpaid overtime settlement this week. Under the settlement deal, a class of almost 2,000 bankers will receive cash compensation for their allegedly unpaid overtime. The settlement covers $1 million in attorneys fees, and a $1,000 enhancement award for the lead plaintiff, as well as administrative and court costs.

The settlement covers mortgage bankers who allegedly did not receive appropriate overtime pay between April 5, 2014, and Nov. 30, 2017. The bankers allege that JP Morgan Chase’s practice violated both state and federal labor and hour laws.

Thirty-five percent of the JP Morgan Chase wage class action lawsuit’s qualifying members have submitted claims for settlement compensation. Under the terms of the settlement, JP Morgan Chase will keep any settlement funds left unclaimed.

Judge Cox expressed approval of the settlement deal, stating that “this seems like an excellent settlement form the court’s perspective, given the allegations in the case and the defenses.” She went on to note that the fact that no qualifying banker had objected to the settlement is “always a good sign.” 

Allegedly, JP Morgan Chase paid mortgage bankers on a system of base pay plus commissions, the commissions known internally as “incentive pay.” However, the bankers state that this system of payment failed to account for the fact that the bankers regularly worked more than 40-hours a week — the bankers state that they were not compensated for any time spent working outside of the standard 40-hour work week.

Allegedly, bankers were required to record their hours in the company’s computer system and were required to record an unpaid lunch break that was often spent working. Additionally, they claimed that the system did not enable them to record time spent working in the evenings.

Adding to the bankers’ claims of JP Morgan Chase’s wage violations, the company systematically and regularly failed to pay bankers their earned commissions within a 13-day window. They state that the Illinois Wage Payment and Collection Act requires companies to pay employees their earned commissions within 13 days of a semi-monthly pay period and that based on this standard, JP Morgan Chase was in violation of Illinois state law.

This mortgage banker unpaid overtime settlement follows a similar settlement from February of this year. In February, JP Morgan Chase paid $8.3 million to settle a class action lawsuit in California that also claimed that the company was violating state and federal law by not paying overtime to employees. The California unpaid overtime settlement provided compensation to assistant bank managers who were allegedly not paid overtime when they should have been.

The Illinois JP Morgan Chase Unpaid Overtime Class Action Lawsuit is Case No. 1:14-cv-09053, in the U.S. District Court for the Northern District of Illinois.

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