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Burlington Settles Overtime Lawsuit for $11 Million

Burlington Stores is paying $11 million in a class action settlement to 1,715 current and former assistant store managers after the retailer allegedly failed to compensate overtime hours.

The off-price merchant denied wrongdoing in the agreement, which is pending federal court approval.

Burlington did not immediately respond to a request for comment.

In February, Kim Payton-Fernandez, a former assistant manager at a Burlington store in Stratford, Conn. from August 2013 to October 2020, filed the complaint against the off-price chain on allegations of misclassifying assistant store managers as exempt from the Fair Labor Standards Act (FLSA). This means Burlington avoided having to pay these employees the proper overtime wages even if they worked more than the allotted 40 hours per week necessary to qualify.

Payton-Fernandez filed the suit in a New Jersey federal court, claiming she regularly worked 50 to 55 hours per week without receiving overtime pay, which is equivalent to “time and a half” the typical hourly rate.

The plaintiff argued that she should not have been classified as exempt from overtime pay due to her job requiring her to do non-exempt work, such as stocking shelves, working the cash register, building displays and cleaning and folding.

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“The primary job duties of plaintiff and the members of the collective did not materially differ from the duties of defendants’ non-exempt hourly paid employees, which included many duties that were manual and non-exempt in nature,” the complaint said.

Payton-Fernandez also claimed Burlington was aware that its assistant store managers were performing non-exempt work but was still unwilling to pay overtime as a way to cut costs.

“Defendants knew that plaintiff and other similarly situated employees were performing the work of non-exempt employees and, based on their actual job duties, plaintiff and similarly situated employees did not fall under any exemptions under the FLSA,” the lawsuit stated.

The suit claimed that Burlington Stores didn’t provide its locations with sufficient “labor budgets” for hourly employees, leading the assistant store managers to do the work without overtime. Burlington reclassified them as hourly employees and eligible for overtime on Feb. 28, 2021, according to the settlement agreement filed Sept. 21.

Payton-Fernandez, alongside co-plaintiffs Lavern Coleman and Darniel Williams, called the settlement an “excellent result” for the employees, citing the quick legal decision, and the “extremely good result” for a FLSA/state law misclassification case, with the average gross settlement of $6,414.

“When viewed comparatively with other FLSA misclassification case settlements, the gross recovery here, is commensurate with, or even better than, other mid-manager misclassification settlements,” according to the plaintiffs’ court documents. “Although every case is different, in the undersigned counsel’s other, most recent settlement for retail chain store mid-manager misclassification claims, the gross recovery will be $5,433.”

The ruling came in contrast to a prior case, Goodman v. Burlington Coat Factory Warehouse Corporation, et al., in which Burlington assistant store managers asserted similar claims but went through nine years of litigation before a settlement was reached in July 2020.  Another case filed in May 2014, known as Kawa, et al. v. Burlington Stores, Inc., et al., contained the same allegations from assistant store managers in California, New York, and Illinois, before also being settled jointly with the Goodman case.

The combined settlement across the two cases paid out nearly $19.6 million.

As part of the most recent settlement, 50 percent of the payments would be allocated as wages
and 50 percent would be allocated as liquidated damages.

Off-price retailer TJ Maxx and convenience store chain Duane Reade settled similar cases brought by assistant store managers, with the former agreeing to pay $31.5 million in 2020 and the latter agreeing to $13.5 million in 2017.

Burlington isn’t the only retailer that has recently been in hot water for underdelivering on wage obligations. In July, two former Philadelphia-area Walmart employees filed a class action lawsuit claiming the retail giant violated the city’s Fair Workweek ordinance by infringing on their rights to a predictable and regular schedule. They allege Walmart failed to provide them with work schedules 10-to-14 days in advance or give them “predictability pay” when their schedules were changed within that window.

Also that month, Patagonia settled allegations that it failed to post work schedules with 14 days advance notice between May 2019 and April 2022, as required by Seattle’s Secure Scheduling Ordinance. The outdoor apparel retailer agreed to pay $54,654.45 in civil penalties to 95 employees at its store in the city, and a $575.31 fine to the City of Seattle.