Burlington Coat Factory Pays Misclassified Employees $11M in Overtime Wages

On September 21, 2022, Burlington Coat Factory (“Burlington” or the “Company”) agreed to pay $11 million to settle a class action lawsuit involving claims that the Company misclassified over 1,700 Assistant Store Managers (“ASMs”) and failed to pay overtime wages. The settlement comes after the Company settled two related actions in 2020 for nearly $20 million.

In February of 2022, ASM Kim Payton-Fernandez filed a complaint alleging that Defendant violated the Fair Labor Standards Act (“FLSA”), a federal law that protects workers from unfair employment practices by establishing requirements for minimum wage, overtime pay, recordkeeping, and child labor. Lavern Coleman and Daniel Williams, also ASMs, later joined the case as Opt-In Plaintiffs (collectively, with Payton-Fernandez, “Plaintiffs”).

Specifically, the Complaint alleges that ASMs at Burlington regularly worked 50 to 55 hours per week but were never paid overtime wages. Plaintiffs argue that ASMs engaged in work that required “little skill and no capital investment,” such as stocking shelves, taking out trash, and building displays, and that as a result, ASMs could not and did not exercise the meaningful independent judgement that is characteristic of exempt employees. Finally, Plaintiffs assert that Burlington disregarded these facts and maintained an underfunded labor budget that relied on improperly classifying ASMs as exempt employees and neglecting to pay overtime wages—both of which are willful violations of the FLSA.

The expedited settlement arrangement, articulated in Plaintiffs’ unopposed motion for settlement approval, comes in the wake of two earlier actions concerning the misclassification of Burlington ASMs: Goodman v. Burlington Coat Factory Warehouse Corp. and Kawa v. Burlington Stores Inc. Plaintiffs claim that the present settlement would encompass ASMs hired after 2013 who were not eligible to opt into the Goodman case as well as ASMs residing outside of New York, California, and Illinois.

If approved by the Court, the $11 million settlement will allow payments of $6,414 to each of the 1,715 potential collective members, attorneys’ fees and costs, and a Private Attorneys General Act payment to the California Labor and Workforce Development Agency. Plaintiffs credit the quick and “extremely good” resolution to “the fact that Goodman had consumed many years of advanced and thorough litigation.”

The Honorable Noel L. Hillman, United States District Judge in the District of New Jersey, is assigned to the case.

Updates will be posted to this blog as the matter progresses. The case caption is Kim Payton-Fernandez et al. v. Burlington Stores Inc. et al., No. 1:22-cv-00608, filed in the United States District Court for the District of New Jersey.

The legal team at Miller Shah LLP has extensive experience representing wage and hour violation matters. If you have any questions regarding this subject or this post, please contact Chiharu Sekino (cgsekino@millershah.com) or Anika Keuning (askeuning@millershah.com). The Firm can also be reached toll-free at (866) 540-5505.

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