Congrats! You’ve Been Promoted! Now Say Goodbye to Your Overtime

Retailer under fire for misclassifying workers as management

While you’d like to think that most employers have their employees’ best interests in mind, the sad reality is that there are plenty of companies willing to cheat workers out of their hard-earned pay in order to line their own pockets.

Sometimes companies will go to creative lengths to accomplish this.

For example, in a lawsuit that’s currently in the news, a major retailer is accused of promoting workers to so-called management positions to avoid paying them overtime. While this suit is big news – and may potentially involve big money – the fact is that this kind of scenario plays out at companies of all sizes every day.

Let’s take a look at what happened in this case and then discuss what it means to workers who may be facing similar situations.

Everyone Was a Manager

John Bouchard was hired as an hourly sales associate for the Dick’s Sporting Goods chain. He was eventually promoted to hardlines manager, one of several titles the retailer uses to denote assistant manager positions.

According to Bouchard’s lawsuit, his new title didn’t feel like a step up. Rather, he claims that his promotion meant working more hours for less money.

As hardlines manager, Bouchard claims that he typically worked about 60 hours per week. His job description included duties such as unloading and stocking merchandise, running cash registers, doing customer service, putting up signs and displays, and keeping the store neat.

However, even though Bouchard was considered a manager, he had no authority to hire, fire, supervise, discipline, or delegate work to other staffers.

Bouchard couldn’t help but notice that he was doing the same work as other employees, but his “promotion” prevented him from collecting overtime.

Frustrated by his situation, Bouchard decided to speak to an attorney. He sued the company for overtime violations and for misclassifying him under the Fair Labor Standards Act (FLSA).

In his lawsuit, Bouchard’s attorneys pointed out that his job duties did not materially differ from the duties of hourly employees. The only significant difference was that Bouchard was classified as exempt, which meant that he was ineligible for overtime.

Meanwhile, several other similarly-situated Dick’s employees from around the country were suing the company as well, and multiple class-action suits were also being proposed. The cases were conditionally certified as a collective-action suit.

Ultimately, Dick’s faced legal action from about 2,200 employees who claimed that they were cheated out of overtime pay.

Rather than face the time and expense of having to defend its actions in court, Dick’s decided to cut its losses and attempt to settle the case. It has filed court documents agreeing to pay up to $10 million to settle claims by 2,200 assistant managers in multiple states.

The settlement has yet to be approved by the court, but attorneys on both sides expect that it will be.

 (The case discussed here is Bouchard v. Dick’s Sporting Goods.)

What Employees Need to Know

It’s important to know that classifications of exempt and non-exempt are dependent on more than title alone. The FLSA states that classifications must be determined based on the terms and conditions of employment, with specific emphasis on the job duties that a person performs.

However, as this fact sheet on the FLSA shows, classification can be an extremely complicated subject. That’s why, if you believe that you’ve been unlawfully denied pay, it’s a good idea to speak to an attorney who has experience fighting wage and hour violations.

Email us at murphy@phillyemploymentlawyer.com, or call (267) 273-1054 for a free consultation.