Worker misclassification is back in the news again, this time with Lowe’s Home Centers the center of attention.
Earlier this month, U.S. District Judge Virginia M. Hernandez Covington conditionally certified as a nationwide class a lawsuit brought by former Lowe’s employees, stating that the suit sufficiently showed that Lowe’s misclassified Lizeth Lytle and similarly situated workers and failed to pay them “the FLSA-mandated time-and-a-half hourly rate for any hours worked beyond 40 in a week, even though the workers lacked discretionary authority over hiring, firing and supervising other employees.”
In the complaint, the plaintiff asserted that Lowe’s …
… willfully and intentionally engaged in a nationwide pattern and practice of violating the provisions of the [Fair Labor Standards Act (FLSA)], by misclassifying Human Resources Managers as exempt under the FLSA overtime wage provision, thereby improperly failing and/or refusing to pay [Lytle] and the Plaintiff Class, comprised of all current and former similarly situated employees who work or have worked over forty (40) hours per week, overtime compensation pursuant to FLSA [29 U.S.C. §§ 206-207].
Of course, cases involving the misclassification of workers aren’t uncommon. But what’s particularly interesting about this suit—which was initially filed in August 2012—is that it involves at least 1,750 HR managers who claim “they weren’t actually managers and were willfully misclassified as exempt from overtime pay requirements.”
I recently spoke with Thomas Lewis, an attorney with Stevens & Lee in Princeton, N.J., about the significance of this case. As might be expected, he immediately pointed to challenges that could easily arise in a case involving HR professionals as the plaintiffs.
“What makes this particularly interesting isn’t just that there’s potentially a Fair Labor Standards Act violation here, but that it’s always difficult when the plaintiff is an HR professional,” Lewis said. “You have to be very careful when the plaintiffs are in HR, because they know all of the hidden secrets of the company and can therefore be ferocious plaintiffs.”
We’ll obviously have to wait and see how this case plays out. But some experts believe it also serves as an important reminder that HR departments aren’t immune from overtime lawsuits.
In a blog post, David L. Barron, an attorney in Cozen O’Connor’s Houston office, writes …
Many exempt HR personnel do not qualify for the executive exemption because they do not directly supervise two or more full-time employees. The administrative exemption, which likely would apply to HR staff, can pose challenges in ligation because it revolves around the level of discretion enjoyed by the employee (which can be subjective). Prudent employers should make sure to keep records of exempt HR employees being involved in hiring, firing or discipline of employees. Keep in mind that the law does not require the exempt employee to have final authority to make decisions, only that he or she be allowed to make recommendations which are given substantial weight. Keeping such records will make it very difficult for the exempt employee to sue for mis-classification and overtime.”
Certainly that’s sound advice in any setting, but especially for those cases involving HR as the plaintiff.