AutoZone Settles Manager Overtime Lawsuit On Eve Of Trial

AutoZone Inc. has agreed to a settlement with the named Plaintiffs in a wage-and-hour action that had been set to go to trial in Arizona last month. The case involved claims by a class of 1,500 store managers who were allegedly misclassified as overtime-exempt. The Memphis, Tennessee auto parts retailer settled the case with the four named Plaintiffs on Jan. 19. Attorneys filed a stipulation of dismissal with the court. The court did not disclose terms of the settlement.

The settlement comes after Arizona federal judge Frederick J. Martone rejected AutoZone’s motion to decertify the Fair Labor Standards Act (FLSA) collective action, which the Plaintiffs said was made up of 1,475 current and former workers.

The Allegations

Former AutoZone worker Michael Taylor filed the case in July 2010. Mr. Taylor said he worked as a store manager for about 14 months. For more than three years, AutoZone improperly classified store managers as FLSA exempt and deprived them of overtime pay, the lawsuit alleged. The suit was certified as a collective action, covering AutoZone store managers who worked anywhere in the U.S. except California, in May 2011. In California, AutoZone classified store managers as nonexempt and paid them overtime for hours worked beyond the FLSA’s 40-hour weekly threshold, Taylor said.

The Plaintiffs in the Arizona case were scheduled to work 50 hours per week and worked either that or much more, they said. AutoZone moved to decertify the action on Jan. 8, warning that the parties had no idea how the case would be managed as a collective and that the Plaintiffs’ trial plan didn’t show any way the company’s due process rights could be guaranteed. The managers hit back on Jan. 13, arguing that AutoZone was just rehashing arguments that had already been made and shot down. Collective standing was decided in 2011, and later that year the court declined to reconsider its decision granting certification, the Plaintiffs said, adding that the court confirmed the collective action certification two months ago in November.

Judge Martone granted AutoZone summary judgment in 2012, but in May a Ninth Circuit panel breathed new life into the case. The panel found that the summary judgment grant was improper because the case was still plagued by factual disputes over the significance of the Plaintiffs’ management tasks, relative to their customer service and manual labor duties. The case was in the U.S. District Court for the District of Arizona.


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