OVERTIME SUITS BEING FILED ON A REGULAR BASIS
Many of us have read or heard about a number of the big box stores, such as Wal-Mart and Dollar General, that have been sued for overtime by managers and assistant managers. These suits have resulted in judgments or settlements in the millions of dollars. Recently, I have noticed a great deal of FLSA overtime lawsuits being filed in Alabama against "mom and pop" stores: such as small or medium size restaurants, many of which are franchisees of larger chains. Several plaintiff's law firms are specializing in filing these suits. In fact, during this week alone, I have seen at least 10 such suits that have been filed this week against such businesses as Flying J, Tire Engineers, Hambo Inc. dba Hamburger Heaven and Stough Convenience Store, Inc.. In these businesses, many managers, and especially assistant managers, are misclassified as exempt and are not being paid overtime when they work more than 40 hours a week. These cases can be crippling for small businesses: liability is often fairly easy to prove, it takes a great deal of time to review payroll records for several years, attorney's fees can be assessed if the case is tried and lost, and there is the possibility of liquidated damages. For a small business in these economic times, it is difficult to come up with several thousand dollars just to attempt to settle the case, let alone litigate and incur a great deal more in attorney's fees and expenses just to get the case to trial.
Practice pointer. As we reach the end of the year, now is a good time to review the classification of employees to make sure that they are properly classified as exempt or non-exempt. Merely calling a person a manager or assistant manager does not, in and of itself, make that employee exempt. This can be a very complicated area of the law, and legal counsel is recommended when classifying employees for FLSA purposes.
