Heads I Win, Tails You Lose
Posted on 10-Oct-08 by The Timekeeper
According to a New York Times article, a federal judge recently ruled that Gristede’s supermarkets in New York misclassified more than 400 current and former department heads and “co-managers” as salaried exempt in order to avoid paying them overtime. Judge Paul A. Crotty of Federal District Court in Manhattan granted summary judgment in favor of the employees, saying they were hourly workers who were entitled to overtime pay.
(Summary judgment means the judge thought the case was so clear-cut they didn’t even have to go to trial. Basically, it says the facts of the case are such that there’s no reason to argue it; the party to whom the summary judgment is granted would win, no matter what. It’s a very strong statement against the practices of the company.)
The primary issue raised in the case was that apparently the company treated these employees as “salaried exempt” when it came to (not) paying them overtime, but would dock their pay when they missed part of a day.
As Judge Crotty wrote, “Gristede’s clearly sought to treat workers as ‘hourly’ for some purposes, (i.e., docking them for hours not worked during the workweek), but ‘salaried’ for other purposes (i.e., not paying them overtime for hours worked in excess of the workweek).”
And, see, the thing is, you can’t do that. If, as Gristede’s lawer, Kevin Nash, asserted, their policies were “consistent with industry standards,” then the industry standards need to be changed. It’s what Linda Neilan, lawyer for the employees called a “heads-I-win, tails-you-lose arrangement.”
While it may be true — as Mr. Nash reportedly stated — that these types of employees “have been treated historically as salaried employees“ in the supermarket industry, what the judge was saying was that Gristede’s wasn’t consistently treating them that way. The company was calling them salaried exempt, but when it came to how the company treated them, Gristede’s changed how it handled their pay depending on what would be most favorable to the company.
I’m all in favor of companies tracking and managing how employess spend their time at work. I mean, for gosh sakes, I work in the time and attendance industry, so it would be pretty odd for me to think otherwise. But you need to be fair about it. If you’re going to dock their pay when they’re out, fer cryin’ out loud, pay them overtime when they work extra. If you’re getting free overtime work out of them, it’s not right to dock them for every doctor’s appointment, school play or bit of car trouble that causes them to come in a little bit late or leave a little bit early.
Bottom line, there would likely have never been a case, and Gristede’s would likely not have found themselves potentially on the hook for what the plaintiff’s lawyers estimate could be up to $25 million, if they had treated these employees fairly and consistently. By getting greedy and trying to stack the deck in the company’s favor, they ended up possibly costing themselves big.
Gristede’s lawyers say they plan to appeal. Yeah. Good luck with that.
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