Bank workers in Illinois are accusing TCF Financial Corp. of misclassifying their jobs to avoid paying overtime and forcing them to sign agreements that limit their legal rights.

The lawsuit, filed in U.S. District Court for the Northern District of Illinois, alleges that Wayzata-based TCF saves money on labor costs by unlawfully categorizing its assistant branch managers as employees exempt from overtime protection. The two named plaintiffs, Amber Schultz and Erik Ortega, claim they often worked 45 to 50 hours a week, performing the same tasks as nonexempt hourly employees, but were not given overtime pay because they are considered management.

At the heart of the lawsuit is the Fair Labor Standards Act, which divides occupations into those that are eligible for compensation when working more than 40 hours a week, and those in the executive and professional class who are not.

"Typically, assistant branch managers do some managerial duties, but that doesn't do the trick under [the FLSA]. It has to be your ­primary duty," said Justin Swartz, partner at Outten & Golden, a New York law firm that co-filed the ­lawsuit. "And their primary duty at branches across the U.S. is customer service, teller work and sales, and those are the same things that they hire hourly people to do who get overtime."

But TCF plans to fight the suit.

"We've reviewed the lawsuit and deny the allegations," said Mark Goldman, a TCF spokesman. "Beyond that, we cannot comment on the specifics of the case, and we look forward to presenting our arguments in court."

One twist could be a dispute resolution agreement that TCF requires employees to sign that waives their right to take grievances to court, including participation in a class action in order to collect unpaid wages. Instead, TCF employees are asked to use the internal arbitration process to file complaints.

"Instead it forces you to go to private arbitration where someone that the company is paying will decide if they violated your rights," Swartz said. "So, TCF has basically insulated themselves from the reach of the law. TCF will likely say arbitration is faster and quicker, but that's just the way they sell it."

U.S. courts have supported companies' right to use these agreements with employees in the past, which means they have "an uphill battle," Swartz recognizes.

"We are not just picking on TCF, we are trying to change the entire banking industry," Swartz said. "The arbitration agreement gives companies a carte blanche to violate the law, and we hope that someday Congress will pass a law that says they can't sign these agreements anymore."

Kristen Leigh Painter • 612-673-4767