Bloomberg BNA reported on November 2, 2017, that a federal judge adopted a magistrate’s decision to decertify a collective action against Urban Outfitters, Inc. On September 6, 2017, a judge ended the action which included approximately 200 of Urban Outfitters’ (UO) department managers claiming UO owed them for overtime. Since the decertification, according to a Bloomberg Law search of federal cases, at least 18 managers have filed individual lawsuits against the retailer.
The complaints allege that the so-called managers were not exempt from overtime despite being treated as such. At least one complaint filed in Massachusetts alleges that calling employees managers to avoid paying overtime was part of a purposeful effort by the company to avoid high labor costs.
The Fair Labor Standards Act (FLSA) is the primary federal law that governs wages and hours. It covers things like minimum wage and overtime pay. The FLSA states that employees must receive 1 ½ their regular rate of pay when they work more than 40 hours in a given week. For example, for working 44 hours in a workweek, an employee who earns $16.00 per hour should receive:
40 hours at the rate of $16.00 per hour = $640.00
4 hours at the rate of $24.00 per hour = $96.00
For total pay for the week of $736.00.
The FLSA does contain some exemptions from the overtime rules. These exemptions are at the heart of misclassification claims against employers, filed by employees who are not getting paid overtime. The exemptions are for employees who earn above a certain salary and perform specific managerial, administrative, or executive job duties.
To fall into an exemption, an individual employee must satisfy two requirements: the salary must be equal to or above the amount set by the FLSA and the actual job duties the employee performs must comply with those contained in the FLSA.
Job title and job description are not sufficient to satisfy the duties test. The employee must perform duties that are managerial, administrative or executive as outlined in the law.
The FLSA specifically states that the exemptions above are limited to white-collar employees. The law states these exemptions don’t apply to “manual laborers or other “blue-collar” workers who perform work involving repetitive operations with their hands, physical skill and energy” regardless of how much money they make.
To be a bona fide manager within the meaning of the FLSA, an employee must engage in decision making that affects the business, must direct the work of others and have the authority to make decisions or have input about hiring and firing.
Employees of UO, in their collective action and current lawsuits, claim that they are managers in name only. They allege they do not perform true managerial duties under the FLSA and are, therefore, entitled to receive overtime pay. According to BNA, UO’s position in the collective action was that the managers exercised “a sufficient degree of independent decision-making in running their stores that would exempt them.”
Michelle Otero, a department manager who filed a lawsuit against UO, is an example of many of the other employees who were part of the collective action. She claimed that UO gave her a salaried position and the title of “manager” so she would be available to work 55 hours a week without receiving any extra pay. Otero alleged that she had no managerial responsibilities and spent the majority of her time performing manual labor.
Jeffrey McEarchen, Daniel Lawson, and Thomas Wolfe were the three UO managers who initiated the now defunct collective action in June 2013. They stated in their initial complaint that they had virtually no managerial duties at UO as their daily jobs primarily involved folding clothes, operating cash registers, cleaning their stores and taking out the garbage. These tasks require virtually no skill and, it can be argued, makes the “managers” blue collar workers.
The initial three plaintiffs also alleged that UO knew that the employees were supposed to receive overtime based on their job responsibilities and that their misclassification was entirely purposeful.
Since the court dismantled the collective action, none of its merits have been litigated. Time will tell how many additional individuals file suit against UO for misclassification and unpaid overtime and what results from the claims. UO may have to pay unpaid overtime in addition to fines and penalties if the court determines their violations of the FLSA were willful.
If you are not receiving overtime pay, it may be because your employer has misclassified you. Consider the following:
If you are misclassified as exempt, contact Leeds Brown Law, P.C., attorneys in New York handling unpaid overtime lawsuits. We may be able to help you and your co-workers recover the wages your employer owes you. We have spent decades filing claims under the FLSA and comparable New York laws for workers who are not getting the pay they are legally owed.
Contact Leeds Brown for a free evaluation of your unpaid overtime claim. We can be reached 24/7 at 1-800-585-4658. Time may be of the essence so don’t wait. Call our New York unpaid wage lawyers today.