More Than A Dollar: $2.3 Million Settlement Between Family Dollar Stores And Nearly 500 Employees

Bernadette Hunton
Bernadette Hunton
11/07/2014

On October 30, 2014, a Colorado federal court judge granted final approval of a $ 2.3 million settlement between the “Everything’s a Dollar” retail giant and a class of 488 current and former store managers who claimed they were misclassified as exempt employees and denied overtime pay in violation of state law.

Under Colorado law, executive or supervisory employees are exempt from overtime pay if they supervise two or more full-time employees, have the authority to hire and fire workers, and spend at least 50 percent of their time on supervisory activities. (Colorado Wage Order No. 30, 7 CCR 1103-1 § 5(b)).

The class member managers complained that they spent most of their time performing non-managerial tasks, such as cleaning the store and working the cash register. Work hours often exceeded more than 40 hours per week and more than 12 hours per shift, but the employees were not paid overtime.  Family Dollar maintained that it was not required to pay overtime because the managers were properly classified as exempt employees given their responsibilities for “hiring, developing, supervising, and disciplining store employees.”

According to the parties, if the class members prevailed, damages would have been approximately $3 million.  The court, accordingly, found that a $ 1.5 million payout to the class members, in addition to attorney’s fees and costs, was fair.

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