Burlington Coat Factory has agreed to pay nearly $20 million to end two lawsuits brought by assistant store managers who say they were misclassified as exempt employees and were not paid overtime wages they were owed. The parties have submitted the settlement agreement to a New Jersey federal court for approval.
The wage theft lawsuits against Burlington claimed that the nationwide retailer had a practice of misclassifying its assistant store managers as exempt from receiving overtime wages under the Fair Labor Standards Act (FLSA). As a result, these employees worked more than 40 hours per week but were not paid at 1.5 times their regular hourly rate for hours worked over 40.
While the FLSA does exempt certain types of jobs that involve managerial duties or specialized skill/knowledge from its overtime protections, the tasks these assistant managers were asked to perform are considered non-exempt. These non-exempt duties included building displays, stocking shelves, assisting customers, scanning prices, cleaning the store, unloading trucks and other non-managerial duties.
Burlington classified its assistant store managers, including operations, merchandise and customer service logistics managers, and other salaried employees with similar positions, as exempt employees as part of a “centralized, company wide policy” to minimize labor costs, according to the lawsuits. Attorneys for the assistant managers claimed that the stores routinely required its assistant store managers to work more than 40 hours each week in order to complete nonexempt tasks while improperly classifying them as exempt from overtime wages.
The $19.6 million deal represents an average gross amount of about $12,000 for each of the assistant managers. This wage theft case is a good example of how many employers classify their employees as “exempt” in order to avoid paying them overtime and statutory benefits that employees are entitled to.
If you have been misclassified as exempt and work more than 40 hours per week, you may be entitled to overtime pay. Contact the attorneys at Pechman Law Group with any questions at 212-583-9500.