Jury awards misclassified Steak 'n Shake managers $3M
- A federal jury in Missouri has awarded a group of Steak 'n Shake managers more than $3 million in back overtime (Drake et al. v. Steak N Shake Operations, Inc., No. 4:14-cv-01535 (E.D. Mo. Feb. 28, 2019)).
- The plaintiffs brought claims under both the Fair Labor Standards Act (FLSA) and state law, alleging they were misclassified as exempt from overtime pay and that they routinely worked more than 40 hours a week.
- In addition to the back pay, the jury also awarded the plaintiffs costs and post-judgment interest.
Unless employees meet both a salary threshold and a duties test, the FLSA requires that they be paid at least the federal minimum wage for all hours worked, plus overtime pay at time-and-one-half their regular rate of pay for all hours worked beyond 40 in a workweek. Additionally, many states and municipalities have more stringent requirements.
To qualify as exempt from the overtime requirements, an employee must earn more than a certain threshold amount and must perform duties that meet one of several tests, like the executive, administrative, professional, computer or outside sales exemptions. As the Drake jury verdict demonstrates, simply calling an employee a "manager" is not sufficient to prove that he or she is exempt from the FLSA's overtime requirements.
Notably, the salary threshold above which employees must be paid to qualify for an exemption may soon be shifting. The U.S. Department of Labor last week proposed to increase the threshold to $35,308 a year (upping it from $455 to $679 per week). Below this threshold, employees would be required to receive time-and-a-half for hours worked beyond 40 in a workweek, regardless of their duties.
- US Department of Labor, Wage and Hour Division Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA)