Federal Appeals Court Finds Misclassified Costco Managers Are Entitled To Unpaid Overtime

The U.S. Court of Appeals for the Ninth Circuit recently upheld verdicts for two Costco receiving managers who were not paid overtime compensation by the warehouse retailer. The managers were erroneously classified as exempt employees and should have received time-and-a-half according to the provisions of the Fair Labor Standards Act (FLSA).

Costco receiving managers typically work an average of 50 hours per week in job duties similar to other hourly workers employed by the company, but when Costco stores conduct warehouse inventories, their hours increase. The FLSA’s wage and hour protections do not extend to exempt employees that devote the majority of their time to managerial duties. According to coverage of the case on Law360 (subscription required), although Costco classified the receiving managers as exempt employees by Costco, both the trial court and the court of appeals found that they spent a minimal amount of time performing managerial duties and were entitled to overtime compensation.

Misclassification of workers, improper timekeeping, and other types of wage theft occur in a number of industries. The attorneys in Sommers Schwartz’ Employment Litigation Group have handled hundreds of wage and hour disputes, and are ready to speak with you if you have been wrongfully denied compensation.  Please contact us today – we’re here to help.