Kohl’s shorted some workers of overtime pay, lawsuit says
MILWAUKEE – Kohl’s allegedly shorted assistant managers when it came to overtime pay, according to a lawsuit.
The national department store chain based in Menomonee Falls, Wisconsin, has been holding down costs by improperly barring assistant store managers from getting overtime pay even though most of their work involves non-supervisory tasks such as unloading freight and stocking shelves, the suit says.
The case is one of the latest in a series of legal actions filed against retailers, restaurant chains and other businesses over how they pay employees who carry manager titles but function in part as rank-and-file workers.
“There’s been a tremendous amount of litigation, and it’s growing,” said Nicholas Fortuna, a New Yorkbased attorney who practices employment law.
Since April 2013, at least 26 settlements totaling nearly $150 million have been reached in cases where companies classified lower-rung managers as exempt from overtime pay, according to federal court records and a report by New York law firm Kaufman Borgeest & Ryan.
Such cases are among a surge of litigation over employee pay more generally. From 2010 through 2017, the number of cases brought in federal courts under the Fair Labor Standards Act rose by nearly 38 percent – more than 10 times the rate of federal civil cases overall.
Typically, lawsuits involving alleged misclassification of employees as managers exempt from overtime have been class or collective actions. Retailers have been the most frequent targets.
Drug store chain Duane Reade agreed to a settlement of up to $13.5 million last year. Dick’s Sporting Goods settled a case for up to $10 million. Petco Animal Supplies settled for up to $8 million.
The latest lawsuit against Kohl’s was filed in federal court in Connecticut in January, then moved to the Eastern District of Wisconsin last month after the company successfully argued for the transfer. The plaintiffs are three former assistant managers at stores in Connecticut, New York and Massachusetts.
Attorneys for the plaintiffs want the case to be declared a collective action covering assistant managers at the more than 1,100 Kohl’s stores nationwide. Kohl’s argues that the case should not be given collective-action status.
Collective actions are somewhat similar to class actions, but typically cover fewer people and aren’t as difficult to win, said Richard Hayber, a Hartford, Connecticut, lawyer representing the plaintiffs suing Kohl’s. A key difference is that people must opt in to a collective action to receive any potential payoff while all members of a certified “class” are automatically eligible.
A Kohl’s spokeswoman said the company does not comment on pending litigation. In court documents, however, the company denies the allegations.
Kohl’s said all its assistant store managers are properly classified as exempt from overtime. The firm noted that the three plaintiffs, among themselves, have held only four of the seven different types of assistant store manager positions throughout the chain.
Further, Kohl’s said, day-to-day duties of individuals holding the same assistant manager title vary greatly.
The current lawsuit against Kohl’s isn’t the company’s first. In January 2016, the department store chain settled a similar action for up to $4 million. As is common in such settlements, Kohl’s denied any wrongdoing. The firm said in court documents that it was settling to avoid the cost and disruption of further litigation.
Federal law requires that most employees receive time-and-a-half overtime pay for work beyond 40 hours a week.
Managers can be exempted if they meet certain conditions. Among them, the Labor Department says, are that management must be their primary duty, they must direct the work of at least two other full-time employees, and they must have significant say in hiring and firing decisions.
The Kohl’s plaintiffs say that while assistant store managers handle some management functions, those duties are routine and are closely supervised by supervisors.