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Longer hours lead to lawsuits over pay

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With its name still fresh on Fortune magazine's "best places to work in 2002" list, Starbucks Coffee Company announced in April that it will pay up to $18 million to settle a lawsuit filed by more than 1,000 angry managers of its California stores.

The managers claimed they were forced to spend long hours doing nonmanagerial tasks but were denied overtime pay.

As the US workweek grows longer, overtime-pay issues are heating up.

Retail giant Wal-Mart finds itself embroiled in a legal battle involving allegations of unpaid overtime by hourly workers.

In May, the Labor Department filed a lawsuit against Tyson Foods, Inc. to recover back wages for workers who were not paid for time spent putting on and taking off work clothing and protective gear.

Other high-visibility companies are now spending millions of dollars to settle cases brought under federal and state laws that require overtime pay for such "nonexempt" employees.

And overtime has become an issue at higher levels. Managers, professionals, and office and sales workers are challenging employers who classify them as "exempt" employees beyond the reach of federal and state overtime-pay provisions.

The federal law governing overtime pay, the Fair Labor Standards Act, is enforced by the US Department of Labor, and any employee can touch off a federal investigation with one call.

A growing number of white-collar workers are picking up the phone.

"Misclassification of employees under the FLSA is rampant," says Charles T. Huddleston, a partner in the law firm Arnall Golden Gregory LLP in Atlanta. The price employers pay "for misclassifying employees can be up to two years of unpaid overtime, doubled by statute, plus attorneys' fees."

Who qualifies as 'exempt'

There are four white-collar exemptions to the minimum-wage and overtime requirements of the FLSA: executives (managers), administrators, professionals, and outside sales representatives.


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