Family Dollar was sued for misclassifying their managers as salaried employees. A Federal Court ruled that Family Dollar must pay $33.2 million for its mistake, which denied its employees’ millions of dollars in overtime pay.
Employers across the nation misclassify their employees. They give an employee the title of manager but not the responsibilities of a manager and pay the employees a salary, so that they are not paid for any overtime hours worked. Because many of those employees do not have managerial responsibilities they have been misclassified as salaried and are entitled to overtime pay for the overtime hours they worked. Lawyers at the Rasansky Law Firm routinely fight for employees who have been misclassified and are owed overtime wages.
Family Dollar, a discount store was sued for misclassifying its managers. A federal judge determined that Family Dollar owed its employees millions of dollars. An article in the Charlotte Business Journal describes the lawsuit against Family Dollar.
A federal judge in Alabama has increased the amount Family Dollar Stores Inc. must pay for classifying certain employees as salaried managers and making them ineligible for overtime pay.Last month, the jury hearing the case said the Matthews-based discount chain would have to pay $19.1 million, but the judge has increased to $33.2 million.
In a case heard in the U.S. District Court for the Northern District of Alabama, jurors found Family Dollar should have classified a number of its store managers as hourly employees, entitling them to overtime pay.
The Alabama verdict came in a second trial in the case. When the case went to court last year, it ended in a mistrial.
According to the plaintiffs' law firm, Schreiber & Petro of Birmingham, Ala., the new ruling comes after the court deemed Family Dollar knew it was wrong when it classified the managers as being ineligible for overtime pay.
Family Dollar says it will appeal.
"Two other federal courts have found that Family Dollar store-manager positions meet and exceed these criteria, as has the U.S. Department of Labor, and we are confident that the federal appeals court will ultimately find in our favor," says Howard Levine, chairman and chief executive of Family Dollar.
In the company's second fiscal quarter, which ended Feb. 25, the company incurred a litigation charge of $45 million, or 18 cents per diluted share, associated with the case.
Family Dollar earned $54.5 million, or 35 cents per diluted share, in the latest quarter, down from $80.1 million, or 48 cents per diluted share, during the year-earlier period.
Matthews-based Family Dollar (NYSE:FDO) is a discount retailer that operates more than 6,000 stores in 44 states.
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