State:
Free Special Reports
Get Your FREE Special Report. Download Any One Of These FREE Special Reports, Instantly!
Featured Special Report
Claim Your Free Copy of Top 100 FLSA Overtime Q&As

We’ve compiled a list of the 100 most commonly asked questions we have received on the federal Fair Labor Standards Act (FLSA) overtime regulations.
Download Now!


This report, "Top 100 FLSA Q&As", is designed to provide you with an examination of the federal FLSA overtime regulations in Q&A format, including valuable tips for bringing your workplace into compliance in an affordable manner.

At the end of the report, you will find a list of state resources on wage and hour issues. This report includes practical advice on topics such as:
  • FLSA Coverage: How FLSA regulations apply to all employers and any specific exemptions from the overtime requirements
  • Salary Level: Qualifying for exemptions and nonexempt employees
  • Deductions from Pay: Deducting for violations, disciplinary reasons, sick leave, or personal leave


Download Now!
June 07, 2012
Did Rite Aid Misclassify Assistant Managers?

Several Rite Aid assistant managers sued the company for classifying them as salaried, exempt employees, depriving them of overtime pay. They first filed a class action suit under the federal Fair Labor Standards Act (FLSA). Then some of them also sued under two states’ wage-and-hour laws. Since the same facts and plaintiffs were behind all the suits, could they be tried together? That’s a controversial question.

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!

What happened. The FLSA suit was filed in a Pennsylvania federal district court. When some of the plaintiffs then filed suits for violation of Ohio and Maryland laws, all the suits were consolidated in the same Pennsylvania court. That’s because of the Class Action Fairness Act of 2005, which provides that a federal court has jurisdiction over such a suit where more than $5 million is in dispute and any defendant does business in a state different from that of any plaintiff.

But the state suits were filed under Rule 23 of the Federal Rules of Civil Procedure, which has different requirements than those of FLSA. Class members must opt in, in writing, to a Rule 23 suit, while they must opt out of an FLSA suit. In many recent years, judges have ruled that such different requirements can’t be combined in court; they are incompatible. And, that’s the way the Pennsylvania district judge ruled in the Rite Aid suits. But plaintiffs appealed to the 3rd Circuit, which covers Delaware, New Jersey, and Pennsylvania.

What the court said. Appellate judges reviewed the language of FLSA and Rule 23 regarding the class opting differences. They noted that FLSA’s opt-in procedure came about in 1947 in connection with the Portal-to-Portal Act and was meant to discourage suits filed by third-party unions, as well as plaintiffs who didn’t join the class until after a successful judgment. Rule 23 is more recent and was meant to broaden the number of plaintiffs in a class.

In fact, one expert said, surveys have shown that just 30 percent or fewer potential class members opt into an FLSA suit, whereas the opt-out rates from Rule 23 classes are less than 1 percent. Here, judges ruled there is no inherent incompatibility between the two procedures. They are the 5th panel to rule that way, along with the 2nd (CT, NY, VT), 7th (IL, IN, WI), 9th (AK, AZ, CA, HI, ID, MT, NV, OR, WA) and DC Circuits. Knepper and Fisher v. Rite Aid Corp., U.S. Court of Appeals for the 3rd Circuit, Nos. 11-1684 & -1685 (2012).

Point to remember: Many see these rulings as bad for employers; damages could explode if they lose. One expert noted a possible reason for the new approach to the issue: The Class Action Fairness Act has changed the landscape.

Featured Special Report:
Top 100 FLSA Overtime Q&As
   
   
 
 
Twitter  Facebook  Linked In
Follow Us
WEBARRAY6
Copyright © 2014 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on http://Compensation.BLR.com
Document URL: http://compensation.blr.com/Compensation-news/Compensation/FLSA-Fair-Labor-Standards-Act/Did-Rite-Aid-Misclassify-Assistant-Managers/