Lawsuit: Edward Jones Trainees on the Hook for $75k in ‘Training Costs’ Despite Receiving ‘No Meaningful Training’

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Edward D. Jones & Co., L.P. and The Jones Financial Companies, L.L.L.P. are facing a proposed class and collective action filed by four former employees who claim the defendants unlawfully required them to sign contracts obligating them to repay $75,000 in “training costs” when they were provided with “no meaningful training.”

According to the complaint, the financial services companies recruit financial advisor trainees (FA Trainees) “with promises of extensive training and high pay.” The lawsuit claims the defendants, however, hold trainees accountable for $75,000 in “training costs” should they leave the firm within the first three years of their “can sell” date, which the suit describes as the date on which the defendants determine that trainees are ready to take on clients.

The case argues that the defendants expect most of their trainees to “not survive” the three-year period - something the companies supposedly do not disclose to new hires. Also hidden from trainees, the lawsuit says, is that Edward Jones "retains the clients, assets, and commissions" they've developed upon their departure, which the case says is often due to the defendants' "high-pressure sales requirements and diminishing pay scale."

"As a result, and by design, more FA trainees will owe Edward Jones a significant portion of their pay as so-called 'training costs,' despite having received no meaningful training," the lawsuit claims. "Armed with the leverage and threat of substantial 'training costs' debt if they leave, Edward Jones forces FA trainees to work long hours and fails properly to record or pay them for hours and overtime worked."

Even worse, the case claims the training received is not worth $75,000, noting that this amount is “more than a full year’s tuition for an MBA program at Harvard, Duke, Northwestern, or the University of Chicago.” The costs are allegedly subtracted from employees’ wages during the three-year repayment period, meaning employees who are terminated or quit early on end up owing the most amount of money “despite receiving the least amount of ‘training.’”

The allegedly unlawful training cost “clawbacks,” according to the suit, amount to the defendants’ failure to pay employees for all their regular and overtime hours. The case alleges that employees are often required to work long hours, and that the companies’ pay structure does not account for all the time they spend working, including hours worked over 40 per week for which they should receive time-and-a-half premium pay. Further still, the case says employees are supposedly encouraged not to record all their hours worked, causing them to be underpaid for both straight-time and overtime hours. The plaintiffs all claim they separated from the company owing money “well in excess” of the total wages they earned during their employment.

“In sum,” the complaint reads, “Edward Jones operates a scheme of indebting FA Trainees likely to fail for the grossly overstated costs of training the Firm never provided, and using that ‘debt’ as leverage to avoid paying wages lawfully owed to FA Trainees. Edward Jones’s practice of encouraging non-exempt FA Trainees not to report all hours worked, not paying non-exempt FA Trainees for those hours, and attempting to create contractual rights to recoup these so-called ‘training costs’ violate state and federal wage laws.”