Discount retailer Burlington Stores, formerly known as Burlington Coat Factory, has agreed to an $11 million settlement in a lawsuit claiming that it refused to pay overtime to assistant store managers who weren't bona fide managers with the power to hire or fire employees but could work 50 to 55 hours a week, according to court documents.
Burlington's assistant store managers cleaned stores and did other tasks similar to hourly employees but their responsibilities did not include "exercising meaningful independent judgment or discretion" as managers, court documents said.
The proposed deal brings to $30.6 million what Burlington Stores has set aside to pay more than 3,000 assistant store managers who claimed in three separate suits filed since 2011 that they were entitled to overtime under federal wage laws for working more than 40 hours a week.
A spokesperson for Burlington Stores said the company did not comment on pending litigation. The retailer denied wrongdoing in the settlement agreement filed with the federal court in Camden on Sept. 22. The proposed settlement needs federal court approval. The latest suit was filed in February.
Seth Lesser, the lawyer for the assistant store managers, said he was not immediately available for comment.
"I would not say this is an isolated practice. It's part of a larger trend of employers labeling people the way they want to label them," said Jennifer J. Lee, an associate professor at Temple University's Beasley School of Law. She said that misclassifying workers allows employers to cut costs.
Discounter TJ Maxx and the chain Duane Reade settled similar cases brought by assistant store managers, with TJ Maxx agreeing to pay $31.5 million in 2020 and Duane Reade agreeing to $13.5 million in 2017, according to news reports.
Burlington Stores, based in South Jersey, operates about 865 discount stores in 46 states and Puerto Rico, with sales of $9.3 billion in 2021.
The company's assistant store managers filed the first suits in Camden federal court in 2011 and 2014. In December 2020, Burlington settled those suits for $19.6 million. More than a half-million pages of documents were produced as part of the court record.
Because the litigation over those two suits dragged on so long, many Burlington Stores assistant managers couldn't participate in them. The latest settlement sought to include those assistant stores managers left out.
The latest suit claimed that Burlington Stores didn't provide its stores with sufficient "labor budgets" for hourly employees, leading assistant store managers to do the work without overtime. Burlington reclassified assistant store managers as hourly employees and eligible for overtime on Feb. 28, 2021, according to the settlement agreement filed with the New Jersey court.
Philadelphia law firm Morgan Lewis represented Burlington Stores in the latest suit.
Lesser is with the law firm Klafter Lesser in Rye Brook, N.Y. Michael A. Galpern, with the firm Javerbaum Wurgaft Hicks Kahn Wikstrom and Sinins, also represented the the plaintiffs. Court documents show that $3.3 million of the $11 million will be paid as compensation to the attorneys representing the Burlington Store assistant managers.
