Law360, December 12, 2012 – Clothing Retailer Hit With $25M FLSA Suit Over OT Pay

Posted December 12th, 2012.

Law360, Los Angeles (December 11, 2012, 9:35 PM ET) — A $25 million collective action was filed Tuesday against Memphis-based clothing retailer City Gear LLC for allegedly classifying its managers as salary-based to avoid overtime payments but continuing to dock pay when the employees failed to work 40 hours per week.

Although those with a fixed weekly salary are often exempt from the Fair Labor Standards Act’s overtime rule, Sanford Heisler LLP senior litigation counsel Andrew Melzer argues that the plaintiffs were misclassified and should have received overtime payments.

In 2009, City Gear adopted a minimum 45-hour work week for store managers and assistant managers under a set salary, but also began prorating the paychecks of those employees who don\’t reach 40 hours per week, according to the complaint.

The complaint also alleges that the defendant knowingly distorted federal labor regulation and threatened workers who spoke out against the practice.

The suit was filed on behalf of current City Gear employee Denithia Pendergrass and former employee Alena Kelley, and it could affect store managers and assistant managers who work for City Gear or its subsidiaries, including Marty’s, Deveroes, CGP, Holliday’s Fashions and The Vault, according to the complaint.

City Gear did not immediately return calls for comment.

Counsel information for City Gear was not immediately available.

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