Kentucky Employment Law Blog

Overtime Case Yields $35 Million To Family Dollar Store Managers

Store managers for Family Dollar stores were awarded $35 million plus in an unpaid overtime case decided by the Eleventh Circuit Court of Appeals in Atlanta, Morgan v. Family Dollar Stores, Inc., No. 07-12398 (11th Cir. December 16, 2008).  The court ruled that 1424 store managers were due $17,788.029.74 in unpaid overtime and an equal amount as unliquidated damages based on Family Dollar's willful violations of the Fair Labor Standards Act (FLSA).

 The case turned on whether the store managers were exempt employees falling within the "executive exemption" to the FLSA.  The court ruled that the store managers were not exempt based on the following:

• store manages spent 80-90% of their time performing manual labor tasks such as stocking shelves, running the cash registers, unloading trucks, and cleaning the parking lots, floors and bathrooms   
• performing manual labor was included in the job description as "Essential Job Functions" of the store managers 
• store managers rarely exercised any discretion because the operations manuals or district managers controlled virtually every aspect of a store's day-to-day operations 
• store managers were closely supervised by district managers, who exercised practical managerial authority over each store 
• the store managers' pay rate was only slightly higher than the hourly rate of their assistant store managers

These factors led the court to conclude that "sweeping corporate micro-management, close district manager oversight, and fixed payroll budgets left store managers little choice in how to manage their stores and with the primary duty of performing manual, not managerial, tasks."  Therefore, the Family Dollar store managers did not fall within the "executive exemption" to overtime pay under the Fair Labor Standards Act.

Another class action lawsuit for overtime was recently filed by misclassified store managers in Jacksonville, Florida. See "Misclassified Managers Sue Dollar General for Overtime."

Store managers for Lush Cosmetics filed suit also in Florida claiming that they were misclassified as exempt from overtime. See "Claiming They Were Misclassified Managers Sue for Overtime."

Robert L. Abell
www.RobertAbellLaw.com

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Stockbroker's Unpaid Overtime Case Against JPMorgan To Go Forward

A class action lawsuit by stockbrokers for unpaid overtime compensation against JPMorgan may go forward, a federal district judge has ruled, Krichman v. JPMorgan, No. 06-CV-15305 (S.D.N.Y.).  The stockbrokers claim that they were compensated "on a commission basis" and did not receive payment for hours worked beyond forty in a work week.  They also claim that losses sustained by customers were deducted from their commissions.  The proposed class would consist of all individuals employed by JPMorgan and related companies since November 28, 2003.  A company of the class action complaint can be read here.

Robert L. Abell

www.RobertAbellLaw.com

Working Off The Clock and Missed Breaks Lawsuit Settled By Wal-Mart

A lawsuit to recover unpaid wages for employees who were forced to work off the clock and to skip meal breaks has been settled by Wal-Mart for $54 million, the New York Times reports, "Wal-Mart To Pay $54 Million To Settle Wage Suit."  Last summer a state court in Minnesota found that Wal-Mart managers had made employees complete computerized in-house training off the clock and both compelled and tolerated employees skipping mandatory breaks.  

Robert L. Abell

www.RobertAbellLaw.com

McDonald's Assistant Managers File Class Action For Unpaid Overtime

A class action lawsuit seeking unpaid overtime compensation filed on behalf of McDonald's assistant managers claims that assistant managers were misclassified as exempt employees during a mandatory one to three month mandatory training period.  A copy of the assistant managers' complaint can be seen here. 

The lawsuit alleges that assistant managers are required to complete a one to three month training period during which they "primarily perform the same non-exempt duties as non-managerial non-exempt employees -- i.e., working at the cash register, attending to the drive through window, taking and filling orders, working at the fry and grill stations."  Also, the assistant managers do not perform managerial duties during the training period and "in fact are discouraged from exercising any such independent judgment"; they do not supervise other employees, do not have any hire and fire authority and do not contribute to personnel actions or decisions.  The assistant managers do work in excess of 40 hours per week but are not paid overtime. 

The class action seeks to recovery unpaid overtime compensation for those individuals who worked as assistant manager employees and underwent the mandatory training period from July 18, 2005, to the present at McDonald's that were owned by the parent corporation. 

Robert L. Abell
www.RobertAbellLaw.com

Police Sick Leave Suit Granted Class Action Status

A lawsuit challenging the practice of the Columbus, Ohio police department to compel employees returning from sick leave to disclose the condition that necessitated the leave has been granted class action status by a federal district court, the Columbus Dispatch reports, "Sick-Leave Suit Against Police Now Class Action."  The police department also requires employees returning from Family Medical Leave time to take for a sick family member to disclose the nature of the family member's illness.  The suit, which was originally filed by six dispatchers, claims that these policies violate the HIPAA, the federal medical privacy law, Health Insurance Portability and Accountability Act). 

Robert L. Abell
www.RobertAbellLaw.com 

$10 Million Police Overtime Case Settled

Police officers in Cleveland, Ohio have settled an overtime compensation case for $10.4 million, the Cleveland Plain-Dealer reports, "Cleveland Settles $10 Million Comp Time Dispute With Police."  The suit challenged the city's policy of not paying overtime to police officers and instead required them to bank "comp time" hours that they could cash out at retirement.  Police officers who wished to use their banked hours for paid time off were often not permitted to do so. 

Robert L. Abell
www.RobertAbellLaw.com

Wal-Mart Found Liable for Underpaying Workers

    The St. Paul Pioneer Press reports that a Minnesota state court judge has ruled that Wal-Mart violated wage and hour laws by shortening workers' meal and rest breaks and forcing them to work off the clock, see "Judge: Wal-Mart Owes Minnesota Workers $6.5 Million for Off-Clock Work, Lost Breaks." $6.5 million was awarded to cover the workers' back pay.  The employees claimed that they were forced to work through their mandated by law breaks and that managers sometimes recorded breaks on their time cards that they never took.  A further trial is scheduled in the fall to determine possible punitive damages and other penalties.  The Minnesota case follows other similar decisions against Wal-Mart in Pennsylvania, California and Colorado.  About 70 similar cases remain pending against Wal-Mart in various courts around the country. 

Robert L. Abell
www.RobertAbellLaw.com

Police Officers Must Be Paid for Time Spent Putting On and Taking Off Required Uniform and Equipment

    Police officers must be paid for time spent putting on and taking off required uniform and equipment a federal district court in California has ruled.  Such time is compensable the court ruled in Lemmon_v_City_of_San_Leandro (U.S. District Court, N.Dist. of California, No. 06-07107).
    Patrol officers were required to wear a "Class B" uniform while on duty along with attendant equipment including a gun holster, ammunition, ammunition holders, handcuffs, handcuff case, tear gas canister, taser, taser case, baton ring, radio case, radio and gun, all of which attach to a duty belt.  When not on duty officers were expected to "cover up" their uniforms.  Some officers changed at home but almost all donned and doffed their uniform and equipment at the police station where they were supplied with lockers. 
    Under United States Supreme Court precedent "activities performed either before or after the regular work shift" are compensable "if those activities are an integral and indispensable part of the principal activities for which [the employee is] employed."  This criteria was met, the court reasoned, because the uniform identifies the police officer as an authority figure, "which is essential to the efficient performance of police work."  The officer's equipment is likewise indispensable because it is "necessary for them to perform all their law enforcement activities." 
    The court also analogized a police officer's uniform to safety wear and equipment worn in other jobs, such as in meat=packing plants, observing that although the "uniform itself is not 'specialized' in its protective properties, its color, appearance and component parts provides a gravitas that serve as an effective deterrent against crime, thereby protecting the police officer." 

Robert L. Abell
www.robertabelllaw.com

Employees Must Be Paid for Time Spent Putting On and Taking Off Safety Wear and Equipment

    Employees at chicken-processing plant must be paid for time spent putting on and taking off ("donning and doffing") safety wear and equipment a federal district court in Maryland has ruled.  Such time is compensable under the federal Fair Labor Standards Act the court ruled in Perez_v_Mountaire_Farms. (US Dist Ct of Maryland, Civil No. AMD 06-121).
    At the beginning of each shift employees were required to put on protective gear including a lab coat, ear plugs, helmet, apron, hair net, safety glasses, steel-toed boots and gloves.  The time spent putting on and taking off this protective gear could not be considered merely "changing clothes" because the employer regarded them as necessary safety equipment and they were not items employees would normally wear.  Therefore, the court ruled that the time was compensable. 

Robert L. Abell
www.robertabelllaw.com