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Case Details for "Family Dollar Stores Inc. "
$35 million judgment issued against discount retailer Family Dollar Stores Inc.
A federal appellate panel affirmed a $35 million judgment issued against discount retailer Family Dollar Stores Inc. as part of a class action lawsuit that accused the company of knowingly violating the Fair Labor Standards Act (FLSA) A unanimous panel of the 11th Circuit U.S. Court of Appeals affirmed a $35,576,059.48 judgment issued by U.S. Judge U.W. Clemon of the Northern District of Alabama.
The class action was first filed in January 2001, alleging that Family Dollar Stores Inc. willfully violated the FLSA by refusing to pay its store managers overtime compensation.
The plaintiffs claimed that Family Dollar paid its store managers a salary, required them to work 60 to 90 hours per week and refused to compensate them for overtime above 40 hours per week. The plaintiffs claim that store managers have limited managerial responsibilities and actually spend the vast majority of their time performing manual labor, such as stocking shelves, running the cash register, unloading trucks and cleaning the parking lot, floors and bathrooms. The plaintiffs estimate that store managers spend five to 10 hours per week performing managerial duties.
The plaintiffs sought unpaid benefits, overtime compensation and liquidated damages as a result of Family Dollar's alleged FLSA violations.
The Judge certified a class of 1,424 store managers. In 2006, an eight-day trial was held where the plaintiffs used payroll records to establish that Family Dollar store managers routinely worked 60 to 70 hours per week. Family Dollar put forth an affirmative defense by arguing that the store managers were executives within the meaning of the FLSA and thereby exempt from overtime pay requirements.
A jury found the store managers were not exempt and that Family Dollar willfully denied them overtime compensation. The jury awarded $19,092,003.39 in overtime wages. Judge Clemon entered a final judgment of $35,576,059.48 against Family Dollar. The judgment consisted of $17,788,029.74 in overtime wages and an equal amount in liquidated damages.
The appellate panel found overwhelming evidence presented at trial that showed that store managers exercised little discretion and spent 80 to 90 percent of their time performing manual labor tasks. The assigned management tasks performed by class members were strictly prescribed in the store manual and required no discretion, the panel found.
The panel referenced testimony from company executives that the company had never done a study to determine how much time store managers typically spent performing manual tasks and that the company did not have a policy addressing FLSA requirements.
The panel rejected Family Dollar's argument that Judge Clemon abused his discretion by denying its motion for decertification. The panel held that Judge Clemon relied on a fully developed record when he denied Family Dollar's motion for decertification. The panel added that ample evidence supports Judge Clemon's finding that store managers were similarly situated under 29 U.S. Code Section 216(b).
"We recognize Family Dollar's assertion that the duties of store managers varied significantly depending on the store's size, sales volume, region, and district. But there was scant evidence to support this argument. Rather, the bulk of evidence demonstrated that the store managers were similarly situated and even Family Dollar perceived no such distinction. Indeed, it exempted all store managers from overtime pay requirements without regard to store size, sales volume, region, district, or hiring and firing authority," the panel said.
The panel rejected Family Dollar's argument that decertification was warranted because there were defenses individual to each plaintiff. The retailer argued that the executive exemption defense is always individualized and fact specific.
"But Family Dollar ignores the overwhelming evidence showing that the Plaintiffs, as a group, shared a number of factual details with respect to their job duties and day-to-day work. Just because the inquiry is fact-intensive does not preclude a collective action where plaintiffs share common job traits. Given the volume of evidence showing the store managers were similarly situated, and the fact that Family Dollar applied the executive exemption across-the-board to every store manager - no matter the size, region, or sales volume of the store - Family Dollar has not shown clear error in the district court's finding that its defenses were not so individually tailored to each plaintiff as to make this collective action unwarranted or unmanageable," the panel said.
Posted on:2009-01-09 n/a
Company: Family Dollar Stores Inc.
Class: Store Managers
Scope: Nationwide
Type of Case: Employment
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