Articles Posted in Fair Labor Standards Act

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After two years of litigation in federal court, U.S. District Court Judge Peter Sheridan ordered Wawa, Inc. (Wawa) to pay $1.4 million in order to settle a class action lawsuit filed against it by assistant store managers called “Assistant General Managers” (AGMs) who alleged violations of the Fair Labor Standards Act (FLSA). In January 2018, Plaintiffs moved to conditionally certify a collective action based on allegations that Wawa misclassified them along with other similarly situated AGMs as being exempt under FLSA i.e., not eligible for overtime pay, and by doing so, failed to pay them overtime for hours worked in excess of 40 hours per week. Gervasio v. Wawa, Inc., 2018 U.S. Dist. LEXIS 4899 (D.N.J. January 11, 2018).

In filing their 2017 complaint against Wawa, plaintiffs alleged they were deliberately “mislabeled” as managers under the FLSA when their duties did not actually reflect managerial duties and their duties were more akin to the duties of other hourly wage employees working at the stores. Id. at *2. However, because they were labeled as managers by Wawa, they were classified as exempt employees and therefore not entitled to overtime wages they would have otherwise earned under the FLSA. Id. Although Wawa eventually re-classified its AGMs as nonexempt employees in December 2015, plaintiffs continued to seek recovery of backpay for the unpaid overtime hours they worked prior to this reclassification. Plaintiffs claimed they worked between 50-55 hours during weeks in which they worked five or more shifts but did not get paid for any time worked exceeding 40 hours. Id.

While nonexempt employees, i.e., employees eligible to receiver overtime pay, are covered by the overtime protections of the FLSA, exempt employees are not. Exempt versus nonexempt employee status depends on three factors: (1) how much the employee is paid, (2) how the employee is paid, and (3) the type of work that the employee performs for his or her employer. Generally, an employee is exempt if he or she is paid at least $23,600 per year, is paid on a salary basis, and (3) performs exempt job duties, namely executive, professional, or administrative duties for the employer. To fall within the “executive exemption,” an employee must meet the following criteria: “(1) the employee receives compensation on a salary basis, (2) [his or] her primary duty is management of a recognized department, (3) [he or] she customarily and regularly directs the work of two or more employees, and (4) [he or] she has authority to hire or fire employees.” Id. at *7 (quoting Essex v. Children’s Place, Inc., 2016 U.S. Dist. LEXIS 108853 at *9 (D.N.J. Aug. 16, 2016)).