A class action suit in Pennsylvania U.S. District Court alleges Lowe's Companies Inc. violated the Fair Labor Standards Act and Pennsylvania's Minimum Wage Act by withholding overtime payments to employees. Lowe's, which is based in Mooresville, N.C., operates more than 1,000 stores in 48 states. Lowe's denies violating state or federal wage laws in court papers it filed in the case.
Attorney Mary Walsh-Dempsey, a Scranton lawyer, said the plaintiffs include 550 people who had supervisory positions at Lowe's stores in the state. All the instances alleged in the case precede the change in federal overtime regulations in 2004, Mrs. Walsh-Dempsey said. U.S. District Judge A. Richard Caputo certified the suit's class-action status last in June 2004.
The suit states that Lowe's pays department managers and assistant department managers salaries, while cashiers, sales, stocking and shipping employees earn hourly wages. The department managers and assistants had virtually no administrative responsibilities and assistant department managers do many of the same tasks as hourly workers, the suit charges.
Lowe's led department managers and assistant managers to believe they were not entitled to their full salaries if they worked less than 40 hours a week, the suit states. The company bypassed hourly workers for overtime work, which was shifted to salaried employees, it charges.
Lowe's required salaried employees to work overtime and perform nonmanagerial tasks, the suit alleges.
According to the state Department of Labor and Industry, employees are entitled to at least minimum wage and overtime compensation at time and a half for working more than 40 hours a week. The Fair Labor Standards Act and Pennsylvania's Minimum Wage Act, though, do not call for overtime for "any employee engaged in a bona-fide executive, administrative, or professional capacity" who is paid a salary rather than hourly wages.
Lowe's unsuccessfully tried to have the suit dismissed in May, 2004, claiming that management-level employees had agreed to the arrangement -- described as a Salaried Plus Overtime Plan. Judge Caputo said it was unclear whether employees understood the plan.
Lowe's is a defendant in at least two other overtime-related federal suits.