- Barnes & Noble has agreed to pay $910,000 to resolve a lawsuit by cafe managers who alleged they were misclassified as exempt employees and denied overtime pay required by the Fair Labor Standards Act (FLSA). The workers will share in $210,000 while $700,000 will cover attorneys’ fees (Brown et al v. Barnes & Noble, Inc., No. 16-cv-7333 (S.D.N.Y., Feb. 26, 2021)).
- The plaintiffs said that although they were labeled managers, they were not responsible for management functions such as hiring and firing and spent the "vast majority" of their time performing the same duties as non-exempt, hourly cafe employees. The cafe managers said their primary duties included making coffee and other beverages, preparing food, serving customers, working the cash register, and cleaning the cafe and that they were closely monitored by store managers.
- The court noted in the order approving the settlement that "there is no likelihood that plaintiffs’ circumstances will reoccur" because Barnes & Noble reclassified the cafe manager positions to non-exempt and overtime-eligible status in October 2016.
Federal law requires that workers be paid at least the minimum wage and overtime for all hours worked over 40 in a workweek, unless an exemption applies. To determine whether workers are exempt from the overtime pay requirement, employers should consider both salary and job duties, sources previously told HR Dive. All of the exemptions except the outside sales exemption require employees to make more than $684 per week. Once the salary threshold is met, the employee's job duties are considered. The required job duties vary, depending on the exemption.
Employers should be aware that exemptions are based on objective standards and are not dependent on employer-determined job titles, according to the U.S. Department of Labor (DOL).
In recent years, several household names have settled similar claims from assistant managers for millions of dollars. A Panera franchisee, for example, paid $4.6 million to resolve claims that it misclassified assistant managers at its stores. And just last month, Kohl's agreed to settle such claims for $2.9 million; a judge approved that settlement March 3.
Notably, DOL gave employers some breathing room last year with respect to classification. In a July 2020 guidance, the agency said salaried executive, administrative and professional employees who are exempt under the FLSA can maintain their exemptions, even if pandemic-related disruptions require them to perform nonexempt duties.