Misclassification of store managers is a ruse sometimes used by businesses to avoid paying certain employees overtime. As we reported in December, a federal appeals court upheld a $35.6 million judgment against Family Dollar Stores, Inc. for wrongly classifying store employees as managers and then denying them overtime pay. Last week, a federal jury in the U.S. District Court for New Jersey ordered Staples, Inc., the world’s largest chain of office supply stores, to pay nearly $2.5 million to 343 plaintiffs because of similar violations to the Fair Labor Standards Act.
The store managers, represented in the class action lawsuit Stillman v. Staples, Inc., charged the retail giant with violating the law when it classified them as exempt and then failed to pay them for overtime. The jury agreed with the plaintiffs and found that Staples had acted willfully in breaking the law. The verdict came after a six-week trial. The amount awarded does not include attorneys’ fees and costs, which the plaintiffs may claim pursuant to FLSA laws.
Staples spokesman Paul Capelli said that the company may appeal the jury’s decision. “We firmly believe that we’re fully compliant with the law,” he said.
The lawsuit was one of many collective and class action lawsuits alleging the misclassification of store managers have been filed against Staples. It was also not the first suit filed against Staples for violations of the FLSA. In November 2007, Staples settled a class-action lawsuit in California for $38 million. That suit related to the classification of assistant managers by Staples stores in California and the retail chain’s failure to compensate the managers for overtime work.