Dollar General Faces New Lawsuit

Sep 2006 — A Montgomery law firm has filed a joint lawsuit in federal court. The suit alleges that Dollar General stores knowingly misclassified its store managers as executives to avoid paying them overtime.

In theory, this exploits a loophole in the Fair Labor Standards Act (FLSA). The FLSA requires employees working more than 40 hours a week to earn time-and-a-half for each extra hour. For example, if a worker is paid $10 an hour, then their overtime rate would be $15 an hour. Some companies try paying workers at a yearly rate instead of an hourly wage to side step this rule.

About 2,500 former and current Dollar General store managers joined the lawsuit filed in U.S. District Court in Birmingham. The suit sought certification as a collective action to join a similar suit filed in Tuscaloosa. The judge refused to certify this case as a class-action case, but did allow the 12 named plaintiffs to proceed.

In 2005, a Tuscaloosa jury awarded plaintiffs in a separate case $38 million, but Dollar General is seeking a retrial. Plaintiffs have filed lawsuits in Birmingham and Columbus, Ga as well.

The latest complaint alleges Dollar General Corp., which runs Family Dollar, Dollar General, and Fred’s, forces its managers to work 60 to 80 hours a week of manual labor as their main duty. Because of this, they spend as little as 10 percent of their time as managers.

Typically, managers focus on administrative work while other employees perform manual tasks like stocking shelves and performing inventory. According to the complaint, the company piles both types of work onto fewer employees, avoiding the cost of hiring enough people to efficiently handle the workload.

Dollar General has 11 stores in Montgomery, three in Prattville, two in Millbrook, and one in Tallassee.

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