Canadian Imperial Bank of Commerce has been hit with a second class-action lawsuit that claims employees worked overtime without pay, and lawyers warn more such suits against employers will follow.
The $360-million suit was filed on behalf of investment bankers, analysts and investment advisers, alleging CIBC World Markets Inc. regularly requires them to work "excessive" hours without extra pay.
"We're talking about professionals who go into the work week knowing they're going to have to stay until the stars come out," said Henry Juroviesky, lawyer and managing partner at Juroviesky & Ricci LLP, which filed the claim.
He contends the practice is widespread, and predicted more suits against financial services companies. "Other peer companies can expect we will be initiating actions against them," he said. "They will be hearing from us."
This week's filing alleges the investment banking unit cultivated an environment where employees are expected to work up to 80 hours a week, contrary to provincial rules.
Staff often have an implicit understanding with their bosses that they'll put in longer hours in return for higher pay or promotions. But "the law gives you overtime," said Mr. Juroviesky, who launched a similar class action against accounting firm KPMG last year. "A silent understanding does nothing under the law."
This week's suit, which CIBC called "unnecessary," comes almost 18 months after a bank teller filed a class action that also claimed the bank failed to pay overtime.
The lead plaintiff in this week's claim is Toronto resident Michael Brown, who worked at CIBC World Markets as a senior analyst from April, 2003, to January, 2004, and says he was required to work about 80 hours of unpaid overtime a month. The filing alleges the pressure to work overtime at the bank's branches was "pervasive" and that employees who didn't work overtime "were pushed out" or disciplined.
None of the allegations have been proven in court and the case will first need to be certified as a class action before proceeding.
CIBC said it plans to "vigorously" defend this action. "Our overtime policy is clearly defined, exceeds legislative requirements in Canada and is easily accessible," spokesman Rob McLeod said.
The bank pays overtime whenever it is required or requested, he said. "We believe that this action is unnecessary given our clear policy and process to resolve employee issues internally."
Unpaid overtime has become more prevalent in Canada as employees strive to meet sales or growth targets, said Douglas Elliott, Toronto-based partner at Roy Elliott O'Connor, who co-filed the first suit against the bank. Now "there will be other actions against other employers" as awareness about overtime rules grows, he said.
- Report on Business Company Snapshot is available for:
- CANADIAN IMPERIAL BANK OF COMMERCE