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October 30, 2014

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Time is money in class-action suit

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L.E. Baskow

Chuck Grahl, a former Circle K employee, is part of a group lawsuit against the company, who allegedly misclassified employees as managers to avoid paying them OT on Friday, May 2, 2014.

As Chuck Grahl approached retirement three years ago, his shifts at Circle K steadily grew longer at the request of his bosses. His workweeks, too, were stretched out and stacked, forcing him to work months in a row without any days off.

All the while, Grahl’s paychecks remained the same.

“It was just always increasing — five hours here, six hours there,” said Grahl, 63. “At one point, I worked nine weeks with just two days off.”

Grahl’s salary never rose above his usual $800 per week because Circle K had long classified the former store manager as exempt from overtime compensation through the Fair Labor Standards Act, a federal statute with myriad interpretations that for years has spawned a bevy of litigation. The FLSA establishes the federal minimum wage, overtime standards, record-keeping and youth employment standards in the private sector and in federal, state and local governments.

Frustrated, Grahl hopped online to find out what, if anything, he could do to shrink his workload or get paid for the extra hours.

He wasn’t alone. A Google search sprung thousands of links to news articles, forums and attorney guides discussing disputes between workers who thought they qualified for overtime pay and employers who thought otherwise.

“I started learning how to do the Internet and found out the little guy was fighting back these major corporations,” Grahl said from his Henderson home. “Some of us, we said, ‘Hey, this isn’t right.’ We started complaining.”

Grahl, who said he was fired after complaining to his superiors, filed a class-action lawsuit in March alleging that Circle K intentionally misclassified him as a store manager to keep him from getting overtime compensation. His lawyer, Las Vegas-based Andy Rempfer, said Circle K plotted to keep costs down by forcing Grahl to work as much as two or three hourly employees.

Another eight former and current Circle K managers in the Las Vegas Valley are represented in the lawsuit as well.

The employees should not have been given management titles because their daily tasks included unloading trucks, stocking shelves, cleaning restrooms and other non-management duties, Rempfer said.

“They don’t have the independent discretion to control or manage,” Rempfer said. “Basically, they just clean the store and work the cash register.”

A Circle K spokeswoman did not respond to repeated requests for comment.

THE LAW

So who can be exempt from earning overtime pay?

In the foggy world of the Federal Labor Standards Act, the answer is both obvious and ambiguous.

Under federal law, salaried employees who earn at least $455 weekly and are tasked with certain work responsibilities can be exempt from overtime by their employers. Employees who qualify for exemption fall under three main categories designated by the U.S. Department of Labor: executive, professional and administrative.

Executive exemption is simple enough: For an employee to fall under this category, they must supervise two or more employees and be able to fire and hire staff.

Professional and administrative exemptions are far more difficult to define, and they are open to broad interpretation.

The Labor Department, for instance, defines administrative employees as those whose “primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.” Professional exemptions apply to staff whose primary duty is “the performance of work requiring advanced knowledge.”

Resolving employee classification disputes generally boils down to identifying specific duties a worker performed, said UNLV professor Ruben Garcia, who specializes in labor disputes.

COURT DISPUTES

What makes a person a supervisor doesn’t always come with a clear answer. And lawsuits follow.

Federal court cases involving FLSA law have ballooned through the years. Filings have doubled over the past decade, with 7,764 lawsuits filed nationwide last year, according to the U.S. Courts system.

Labor-related lawsuits in Nevada, meanwhile, stayed steady, with 122 cases filed last year. That included FLSA disputes and other litigation.

Such disputes may diminish in the coming years. The Obama administration in March announced a plan to expand the federal definition of who is eligible for overtime that could cover millions working so-called white-collar jobs.

President Barack Obama wants the U.S. Department of Labor to consider raising the minimum salary required for overtime exemption to promote fairer pay practices. Obama did not specify an amount. The current minimum weekly salary of $455 translates to $23,660 a year, below the federal poverty level of $23,850 for a family of four.

Nevada law requires employers to pay eligible employees overtime — one and a half times their regular rate — for all hours in excess of 40 worked during a workweek.

EMPOWERED EMPLOYEES

Like Grahl, many employees suing employers over FLSA disputes begin their legal battles by searching online for advice about fair wages, UNLV business professor Jeff Waddoups said. As once-dominant labor unions dwindle in membership, employees are empowering themselves using the Internet as they seek relief from perceived labor law violations.

Why all the lawsuits?

Often, employees who complain risk being fired. Without attorney representation, they have no bargaining power because firms, which benefit when unemployment is high, can quickly fill vacancies.

Union-backed workers, by contrast, typically don’t hesitate to speak up because they’re well represented and well versed in labor laws. They typically don’t need to sue.

Overtime wage disputes “would never happen to employers working in the Culinary Union,” Waddoups said. “They’ve got a big, strong union that looks out for workers.”

‘WE’RE FIGHTERS’

Grahl’s Web search led him to another suit filed against Circle K in Florida alleging employee misclassification. That suit, presented on behalf of a Pinellas County store manager, James Barends, was resolved May 20 in U.S. District Court in Tampa. It was one of dozens of settlements by Circle K with store managers in Florida.

Grahl hopes the company will settle his case with compensation, too.

Since he was fired in February, Grahl’s family has relied on the salary of his wife, a manager at Kohl’s. Grahl said his family, which includes two adult daughters and a granddaughter, has struggled to make ends meet. Unable to find another job, he has filed for Social Security retirement benefits.

“At my age, there’s not too many convenience stores that want to do all that training and all that work,” Grahl said. “Most managers are between 25 and 45, on average.”

Still, Grahl’s wife, Ginger Grahl, said losing a job has been good for her husband’s health. Before, he seldom took time off to avoid being reprimanded by his supervisors. Now, he’s able to relax at home away from the stress of such demanding hours.

“It has been frustrating to see the way he has been treated,” Ginger Grahl said. “But we’re fighters. We’ll get through this.”

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