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PetSmart Inc. has agreed to pay $3.8 million to settle a collective action lawsuit brought against it for allegedly misclassifying operations managers as exempt from the Fair Labor Standards Act’s overtime requirements.
The suit claimed that PetSmart deliberately misclassified the operations managers as exempt employees to avoid paying them overtime for hours worked in excess of 40 a week, even though the work performed was non-managerial in nature. The action was initiated in 2012 by four current or former employees who sought unpaid overtime and liquidated damages.
A federal district court judge granted the employees’ request for conditional certification in December 2013 after finding that they had adequately demonstrated a factual nexus between their personal experiences on the job and those of other operations managers. Notices were then mailed to 1,100 potential collective action members in 2014 and 331 ultimately agreed to join the action.
Those 331operations managers who opted in to the action will share in the settlement, with payout varying based on the number of weeks each worked. Plaintiffs’ lawyers have requested fees and expenses totaling $1.5 million, which will also be paid from the settlement.
In the settlement agreement, filed April 28 in federal court in Delaware, PetSmart doesn’t admit to any wrongdoing and restates its belief that it properly classified the operations manager position as exempt.
Preliminary approval of the settlement has been requested by the plaintiffs.
McKee v. PetSmart Inc., D. Del., case number 1:12-cv-01117, April 28, 2015.
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