Jan 2004 — Discount retailer Dollar General will contest a court ruling allowing employees to opt into a lawsuit challenging the company’s decision to exclude store managers from overtime pay.
Earlier this week, the U.S. District Court for the Northern District of Alabama in Birmingham issued an order certifying an “opt-in” class of employees who could join the lawsuit.
Dollar General believes current and former managers were properly classified as exempt from overtime requirements under the U.S. Fair Labor and Standards Act.
“We believe the court order is contrary to the facts and applicable law,” said Andrea Ewin Turner, spokeswoman for Dollar General. “We intend to pursue avenues of relief.”
In a statement filed with the Securities and Exchange Commission, Dollar General warned, “No assurances can be given that the company will be successful in defending this action on the merits or otherwise, and, if not, the resolution could have a material adverse effect on the company’s financial position.”
The company did not disclose its potential liability should it lose the case. Turner declined comment.
The court ruling allows those employed by Dollar General as store managers since March 14, 1999, to join the lawsuit if they regularly worked more than 50 hours a week, supervised fewer than two employees, lacked authority to hire or fire workers without approval of an area manager or worked in non-managerial jobs in stores other than the one the employee regularly managed.
Roman A. Shaul, a member of the law firm Beasley Allen Crow Methvin Portis and Miles in Montgomery, Ala., said the court’s ruling broadens the number of people who can join the lawsuit. However, an individual must agree to participate in any settlement.
“The management exemption is based on certain criteria,” Shaul said. “It’s our position that the criteria were not met, that the plaintiffs are therefore not exempt and therefore must be paid overtime.”
The lawsuit was filed in March 2002 on behalf of Edith Brown, who worked as a manager for Dollar General in Alabama. She is no longer with the company.
Dollar General, based in Goodlettsville, is a discount retailer with 6,709 stores in 27 states. The company sells food, beauty products, cleaning supplies, clothing, and housewares, targeting customers with a median household income of less than $35,000.
Dollar General’s shares closed Tuesday on the New York Stock Exchange at $21.27 a share, up 22 cents, or 1 percent. The 52-week high of $23.40 a share was reached on Aug 28.