Former employee loses class action suit asking for overtime pay against Family Dollar

PHILADELPHIA – A January 2014 decision by a federal court granting summary judgment for Family Dollar in an ex-employee’s class action lawsuit was upheld by the U.S. Court of Appeals for the Third Circuit on April 9.

Albert Itterly was a Family Dollar store manager in Allentown between July and November 2007 who filed a class action suit in March 2008 alleging he and other managers were denied overtime compensation payments in violation of both the Fair Labor Standards Act (FLSA) and Pennsylvania Minimum Wage Act (PMWA).

Itterly claimed to be working 63.5 hours per week and earning a weekly salary of $930.00, which did not include additional compensation for any time worked past 40 hours in a given work week. Under PMWA, executive employees are classified as exempt from consideration for overtime pay.

However, the plaintiff argued he was not strictly an executive employee performing managerial duties such as supervision, scheduling, disciplining and hiring of subordinate employees, and “virtually all of his time” was spent performing non-managerial work in the course of the store’s daily business, such as unloading freight merchandise deliveries, stocking shelves and working cash registers.

Besides non-managerial tasks occupying the lion’s share of his work hours, Itterly’s complaint further claimed his executive duties were also shared by assistant store managers and his ability to have complete oversight of the running of the store was limited by his district manager.

Family Dollar’s opposing contention centered on Itterly’s executive managerial responsibilities being crucial for the day-to-day operation of the store, and should thus take precedence over any other tasks during the course of the work day.

In January 2014, Judge Lawrence F. Stengel, of the U.S. District Court for the Eastern District of Pennsylvania, granted a motion for summary judgment in favor of Family Dollar, deciding that there was no question Itterly was correctly classified as an executive employee and thus ineligible for overtime compensation.

“Under the facts of this case, the defendants meet the burden of proving that the plaintiff’s primary duty was management of the store,” Stengel wrote. “A reasonable jury could not find that the plaintiff falls outside of the executive exemption and therefore be entitled to overtime under the PMWA.”

Stengel also pointed to 21 similar cases made by store managers against Family Dollar in the Western District of North Carolina, all of which resulted in summary judgment in favor of the company, and saw no reason to rule differently in this particular instance.

Itterly appealed Stengel’s decision to the Third Circuit, before Circuit Judges D. Michael Fisher, Kent A. Jordan and Joseph A. Greenaway, Jr.

But in authoring his opinion on behalf of he and his colleagues, Greenaway concurred with Stengel that Itterly was ultimately an executive employee and unable to receive overtime pay.

“In making this determination, we look to whether the management activities are critical to the successful operation of the enterprise,” Greenway said in a 12-page opinion released Thursday.

Greenaway opined Itterly’s executive responsibilities were in fact critical for successful day-to-day operation of the business, thus giving them “primary duty” status and priority over his non-executive responsibilities.

“Appellant is an exempt employee under the PMWA as a matter of law,” Greenaway wrote. “Appellant performed managerial duties critical to the success of the Allentown store with minimal direct supervision. The fact that he consistently performed nonexempt tasks the majority of the time does not alter our analysis.”