Family Dollar Has a Holiday Headache

The $35.6 million award - a $19.2 million jury verdict which the court cut to $17.8 million, and an equal amount for liquidated damages based on willfulness - in the Alabama-based nationwide collective action against Family Dollar Stores has been affirmed by the US Court of Appeals for the Eleventh Circuit in a 106-page opinion. The back pay and liquidated damages will be spread among 1424 retail store managers who were found not to be exempt "executives" because they spent a majority of their time on manual work; hundreds of depositions were taken from a pool deemed representative of the nearly 2500 managers who had opted into the case, which arose out of claims made before the FLSA white-collar regulations were amended in 2004. Morgan v. Family Dollar Stores, Inc.

Meanwhile, back in the checkout line, the company is engaged in another huge battle in the Western District of North Carolina, In re Family Dollar Stores, Inc. Wage and Hour Employment Practices Litigation, No. 3:08-CV-01932-GCM. Although that case was stayed while settlement negotiations have been ongoing, additional plaintiffs continue to queue up for this post-2004 attack on the company's compensation and classification system. It remains to be seen whether Family Dollar seeks further review of the Alabama matter, as well as what effect the new regulations, which don't require a specific percentage of exempt work in order to alleviate overtime requirements, may have on the settlement talks in Round 2.

And, by the way, please note that there has been no award of attorneys' fees reported in the Morgan case, so the employer has yet more opportunities to dig deep. What a way to end a year!