Merrill Lynch has agreed to pay up to $37 million to over 3,000 of its California stock brokers to settle claims that it failed to pay overtime wages. 

In Burns v. Merrill Lynch, Pierce, Fenner & Smith Inc. a former Merrill Lynch broker claimed that his position was "non-exempt," and he demanded overtime compensation at a rate of one-and-one-half times his regular rate of pay for all hours worked over 40 each work week. 

The employer argued that the brokers were exempt administrative employees under the FLSA, and that they satisfied the "highly compensated" exemption under the revised regulations implemented by the Department of Labor in 2004.  This exemption is applicable to certain employees earning $100,000 a year or more.  Merrill Lynch also argued that the brokers were exempt from overtime payments under Section 7(i) of the FLSA, which applies to certain groups of commissioned sales representatives in retail or service establishments.