Wealth management firms to pay $25.5 million to settle employees’ class action after allegations that several major companies restricted hiring and suppressed wages for thousands of workers. The agreement is one of the most significant labor-market settlements in the financial advisory sector this year. It follows updated court filings confirming that the companies involved will move forward with a multimillion-dollar settlement fund once the court grants final approval.
Background of the Case
The class action began in early 2024 after former employees claimed that multiple wealth-management firms had entered into hiring-restriction agreements. These arrangements allegedly ran for several years and limited wage growth, job mobility, and recruiting opportunities for financial professionals.
The complaint focused on a period from 2012 through 2020, during which the firms were accused of informally agreeing not to hire or solicit each other’s employees. Plaintiffs argued that this created an unfair labor environment and violated federal antitrust laws.
The class size includes more than 4,000 current and former employees across the United States. Most worked in advisory, compliance, support, operational, and planning roles. The agreement covers anyone employed by the listed firms during the identified years.
The defendants continue to deny wrongdoing, but they chose settlement to avoid further litigation, extended discovery, and the high cost of ongoing legal disputes.
Settlement Structure and Payouts
Under the proposed terms, a $25.5 million settlement fund will be created. This fund will provide compensation to eligible class members while also covering attorney fees and administrative expenses.
Key Financial Details
- Total fund: $25.5 million
- Attorney fees request: up to one-third of the fund
- Estimated eligible employees: 4,400 to 5,000
- Estimated average individual payout: $3,700–$5,100, depending on final class size and individualized allocations
- Payments will vary based on compensation level and duration of employment
Many class members will not need to submit a claim, as identification will rely on internal employment records. This process helps ensure broad participation and avoids leaving compensation unclaimed.
The settlement is currently awaiting final approval from the federal court. A fairness hearing is set for later this year, where the judge will review objections, administrative plans, and payout schedules before authorizing distribution.
Why the Settlement Matters for the Industry
This settlement carries implications across the wealth-management and broader financial-services sectors. Hiring competition has intensified in recent years as advisory firms expand, acquire smaller practices, and pursue aggressive recruiting strategies. The resolution of this case signals an increased focus on employment and wage practices within the industry.
Industry Takeaways
- Firms must review recruiting policies to ensure compliance with antitrust standards.
- Non-solicitation or informal hiring restrictions between competitors may face stronger scrutiny.
- Employers could see more audits, more private litigation, and more class-action filings in the coming years.
- Workers may become more aware of their rights regarding job mobility and wage competition.
As labor-market enforcement continues gaining traction, wealth-management companies may adopt stronger compliance training, updated hiring policies, and clearer guidelines for interactions with competing firms.
Impact on Employees
For employees who worked during the years covered in the lawsuit, the settlement provides financial compensation and recognition of workplace concerns. While payouts differ by individual, the agreement ensures that every eligible class member receives some measure of restitution.
What Employees Should Know
- Payments will begin only after final court approval.
- Amounts depend on job role, pay history, and time spent at the company.
- Some individuals may need to update mailing information once the settlement administrator begins outreach.
- The settlement does not require employees to prove personal harm; eligibility alone secures compensation.
This approach helps simplify the process and allows compensation to reach a broad group of workers impacted during the alleged period.
Next Steps in the Settlement Process
The case remains in the final-approval phase. Court documents show that the settlement administrator is preparing for distribution once the judge signs off on the agreement.
Upcoming Milestones
- Court review and fairness hearing
- Notifications to eligible employees
- Final approval order
- Administrative processing
- Distribution of checks or electronic payments
The final court hearing will determine the timeline for payouts. If no significant objections arise, payments could begin shortly after approval, depending on administrative processing times.
Timeline Overview
| Year / Date | Key Event |
|---|---|
| 2012–2020 | Alleged hiring-restriction period across participating firms |
| 2024 | Class-action lawsuit filed in federal court |
| 2025 | Settlement agreement reached for $25.5 million |
| Late 2025 | Court scheduled to review and approve settlement |
| Post-approval | Distribution of funds to thousands of eligible employees |
This sequence highlights the multi-year scope of the case and the current point in the legal process.
Broader Labor-Market Context
The settlement arrives at a time when U.S. regulators are increasingly attentive to employment-related antitrust issues such as wage-fixing and no-poach agreements. Labor competition has become a major area of focus across industries, including healthcare, technology, and financial services.
This case may influence how companies document their recruiting practices and how executives communicate during talent-related discussions. Many firms may now implement stronger internal controls and more formal compliance oversight to avoid potential legal exposure.
Conclusion
The decision by wealth-management firms to commit $25.5 million toward resolving this class action underscores the importance of fair labor practices in the financial sector. As the case moves toward final approval, thousands of employees are expected to receive compensation for the hiring restrictions alleged in the lawsuit. The settlement also serves as a reminder that competitive labor markets are essential for healthy business growth and employee opportunity.
If you worked for any of the involved firms during the covered years, stay alert for settlement updates and share your thoughts with others in the discussion below.