A daily look at legal news and the business of law...
Bank of America Hit With a $100 Million Wage Suit
Apparently large scale basic labor law violations aren't limited to Wal-Mart (WMT); Bank of America (BAC) was hit Friday with a class action lawsuit charging B of A failed to pay for hours worked, failed to pay overtime, and failed to provide required breaks. B of A currently employs about 294,000 people, and the suing class may be as large as 180,000 people. Even assuming half the class are former employees, that means B of A allegedly failed to properly pay more than one in four of its current employees. If two thirds of the class are former employees, that's still one in five present employees claiming that they're not getting what they're owed. While not paying for work is wrong at any time, during the Great Recession, it's especially heartless. Not only do the workers need the money more than ever, they can't easily quit and get a job with a better employer.
B of A is on something of roll this year, getting sued by customers for inflating overdraft fees, by strangers for foreclosing on a house bought with cash, and by the government for failing to make key disclosures when it bought Merrill Lynch. On top of that, it's been cleaning up messes it bought when it acquired Countrywide too.
Countrywide (B of A) Pays $108 Million For Abusing Borrowers
On that last point, while it's good news that Bank of America agreed to pay $108 million to compensate bankrupt borrowers victimized by Countrywide (B of A bought Countrywide in 2008), it's worth dwelling on precisely what Countrywide did to the borrowers as an example of the depravity of lenders. Most frequently, Countrywide inflated charges for default related services like property inspections. (Countrywide subsidiaries would perform the services, mark up the cost to Countrywide, who would mark it up to the struggling homeowners, who ended up facing charge inflation of up to 400%). Some targeted homeowners weren't even in default on their loans. But that kind of highway robbery wasn't the worst of it. Apparently, homeowners who used Countrywide loans to buy a house, and then ended up in bankruptcy while trying to keep the house -- Chapter 13 bankruptcy filers -- couldn't get Countrywide to tell the bankruptcy court the truth. Countrywide would claim the homeowners owed more than they did, would not report payments that the homeowners had made and secretly added fees. I mean, talk about kicking someone when they're down...
Note to Oil Spill Victims: Don't Sign a Litigation Release
BP (BP) is making payments to spill victims, though victims charge it's far too little. Getting more, unfortunately may require suing BP, which makes this item from the Am Law Litigation Daily important for victims to keep in mind. It's fine to take payments from BP, meaning the payments won't damage the victims' chances to sue for more, so long as the victim doesn't sign a litigation release when they take the check. If ever there was a time to read the fine print, this is it.
And in the Business of Law...
Most clients won't subsidize summer associates any longer, reports the New York Law Journal. That's not surprising, given that as useless as junior associates are, summer associates are orders of magnitude less competent. Ironically for firms, the summer associates this year are more likely to add value to clients, given that the smaller classes allow the associates to do more substantive work and receive more supervision.
Law students don't learn that much about how to be a lawyer during law school (they learn how to "think like a lawyer.") Texas Lawyer has 10 habits law students should develop asap if they want to be good lawyers.
As Above the Law notes, making student loans more easily dischargeable in bankruptcy would a huge boon to legal education, and the chances of the change happening have risen slightly. That is, the chances have gone from a snowball's to perhaps an iceberg's chance in hell.
A faint positive note: the legal profession gained 300 jobs in May, reports American Lawyer. Of course, that whispery upbeat sound is more than drowned out by the background noise: 22,200 legal jobs lost since May of last year.
Legal Briefing: Bank of America Hit By Massive Wage Lawsuit