Eleventh Circuit Affirms Major FLSA Verdict for Employees

The Eleventh Circuit recently upheld a major verdict for managers of Family Dollars Stores. The employees claimed that they worked 60 to 70 hours per week without receiving overtime pay. The Defendnat claimed the executive exemption. The Eleventh Circuit affirmed a trial verdict for the Plaintiffs.

The case involved an opt-in class of 1,424 store managers in a collective action under the Fair Labor Standards Act. The Eleventh Circuit wrote:

"Plaintiffs presented evidence that store managers rarely exercised discretion because either the operations manuals or the district managers’ directives controlled virtually every aspect of a store’s day-today operations. The manuals and other corporate directives micro-managed the days and hours of store operations, the number of key sets for each store, who may possess the key sets, entire store layouts, the selection, presentation, and pricing of merchandise, promotions, payroll budgets, and staffing levels. The manuals even instruct store managers on the smallest details, such as how to arrange clip boards, what items go in each of the four drawers of the single file cabinet, and how to remove spots and chewing gum from store mats. The few decisions not mandated by the manuals and corporate headquarters are vested in the district manager. These decisions include the power to change store hours, close for bad weather, approve changes to store layouts, establish all employees’ initial rates of pay, approve all pay raises, set payroll budgets, control the total labor hours allocated to each store, approve the hiring and firing of assistant managers, and even approve the use of appliances such as coffee pots. Even when a store manager exercised discretion in scheduling employees for the week, she did so within the strict constraints of mandatory store hours, a limited payroll budget, a prohibition on overtime work by hourly employees, and a staff scheduler. This evidence supports a reasonable jury finding that Family Dollar’s store managers had few, and infrequently exercised, discretionary powers. "

One of the most damaging pieces of evidence was the testimony of Dollar Stores' Senior Vice President of Store Operations. He testified -- or attempted to testify -- about how the company reached its decision to classify all its store managers as exempt:

Q. Now, my question is, did you make that decision?
A. No, sir.
Q. Did your boss, Mr. Barkus, make that decision?
A. To my knowledge, it’s been in place -- it was in place when I camehere 29 years ago. So --
Q. Okay. So, do you know anybody that will own up to that decision;say, “that was my decision”?
A. I do not.
Q. Mr. Levine, has he ever told you that’s his decision?
A. No, sir.
Q. Can you give us any clue? And the reason I’m asking you this, Iasked you this in the deposition and we’ve been asking a lot of peoplein depositions: Who made this decision, do you know?
A. I do not.