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Wednesday, August 28, 2013

Dunkin Donuts, Strippers and Anheuser-Busch in FLSA Cases

By: Tommy Eden

Dunkin Donuts: Franchisee with 55 locations in New Jersey and New York has agreed to pay $198,000 in back wages after a Department of Labor investigation revealed violations of the Fair Labor Standards Act (FLSA) by failing to pay 56 store managers overtime. The underpaid managers were exempt, salaried employees, but saw their pay reduced when they logged less than 60 hours per week.
The FLSA's overtime exemption for management employees who handle certain executive supervisory responsibilities only applies if those workers earn a guaranteed weekly salary of at least $455. While the job duties of managers fell within the parameters of the executive exemption they did not receive a regular guaranteed weekly salary. These managers were owed overtime once they worked 40 hours for the week because taking improper salary deductions invalided their exempt status.

Strippers: Georgia federal judge recently granted certification to a class of exotic dancers in a suit accusing The Great American Dream Inc., which operates under the name Pin Ups Nightclub, of improperly categorized its strippers as independent contractors in order to avoid paying them minimum wage. The dancers also alleged in their complaint that the strip club unlawfully deducted nightly "house fees" from their tips and required them to share their gratuities with however many other entertainers were dancing on stage simultaneously. The case is Stevenson v. The Great American Dream Inc. 

Free Beer: Earlier this month a class of California brewery workers hit Anheuser-Busch with a suit accusing it of denying them proper overtime wages. The suit alleges that the value of free and discounted beer (called “incentive payments”) was unfairly excluded in pay-rate calculations, lowering their overtime payment. When non-exempt employees work more than 40 hours in a week, they are entitled to one-and-one-half times their “regular rate” of pay. The regular rate is to be adjusted when an employee receives a bonus or other incentive compensation. The case is Anthony Controulis v. Anheuser-Busch.

Common Sense Counsel: I don’t make up this stuff. All of these cases were actually reported in the last 30 days and represent a small fraction of the FLSA cases I have reviewed for this article. FLSA violations are the most common and costly employment lawsuit being brought and employers are paying out millions in settlements and attorney fees. With the FLSA self help to determine if you are in compliance is simply not a legal option and an ounce of prevention with a wage and hour audit is the only risk reduction strategy.

Tommy Eden is a partner working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-246-2901. Blog at