Whether an employee qualifies as exempt from the overtime pay requirements of the Fair Labor Standards Act (FLSA) doesn’t turn on their job title. Instead it comes down to the employee’s actual duties and responsibilities. In a pending lawsuit, the nationwide retailer Urban Outfitters will find out whether its attempt to classify department managers as exempt will survive scrutiny.
As reported by Bloomberg BNA, a former retail department manager recently sued Urban Outfitters claiming that the company should have paid him overtime because he was often engaged in non-managerial assignments.
The FLSA requires that all non-exempt employees be paid overtime premiums of one and one half their regular hourly rate for all hours worked more than 40 in any single week. Many of these “white-collar” exemptions require that the employee be paid on a salary of not less than $455 per week, but also involve an analysis of the duties the employee is engaged in to qualify for the exemption. The Urban Outfitters retail managers argue that their job duties were non-exempt and thus required overtime pay.
While the lawsuit was initially filed as a collective action on behalf of all of Urban Outfitters’ retail managers, the class was decertified in September 2017 due to dissimilar situations amongst class members. Since then, retail managers have been filing individual FLSA lawsuits against the company. At least 18 department managers have filed individual lawsuits against Urban Outfitters since the collective action was decertified.
The determination of whether employees are similarly situated for purposes of a FLSA collective action is made on a case by case basis. Most jurisdictions follow a two-step approach to collective action certification in FLSA cases. The first step involves a very lenient standard that often permits for conditional certification in order to provide notice to other class members. However, the second step is a more detailed and critical inquiry to determine whether the case is truly best handled as a collective action.