Nationwide convenience store chain Circle K has agreed to settle an overtime collective action for an estimated $8.3 million in compensation. The suit, initially filed in 2014, accuses Circle K Stores Inc. of failing to pay store managers overtime pay for their extra hours.
According to court documents obtained by the Las Vegas Review-Journal, around 1,100 Circle K store managers will benefit from the settlement, though individual compensation amounts are expected to vary widely based on an employee’s length of employment, region, and seniority.
Grahl v. Circle K Class Action
The lawsuit was filed by Charles Grahl, a former store manager for Circle K who sought to represent the best interests of over 1,000 other store managers across the country. Eventually, the collective action’s roster of plaintiffs came to include about 1,100 individuals.
Court records say that Grahl worked as a store manager at a convenience store in Los Angeles from 1995 to 2001, and again from 2005 until 2014. He was paid $800 a week in salary. Grahl says he and the other store managers were frequently required to work at least 16 hours in overtime per week.
Manager: Circle K Misclassified Employees
In his lawsuit, Grahl accused Circle K of misclassifying him and other store managers as overtime-exempt employees. It appears that Circle K classified the managers as “executive” employees, making use of a white-collar exemption contained in the Fair Labor Standards Act, a federal law that governs minimum wage and overtime requirements in America.
Executive employees are not entitled to overtime wages, but Grahl in court documents disputed the classification, arguing that his job tasks failed to meet the description outlined by the Labor Department.
Executive Employees Under The FLSA
As Grahl notes, executive employees (under the Fair Labor Standards Act) must have the authority to make personnel decisions. At the least, executives need to have actual input on decisions of hiring and firing other employees. In addition, executives are required to make independent decisions on matters affecting the business, according to Labor Department guidelines. Grahl says neither he nor any other store managers at Circle K were able to make these independent judgments, thus invalidating them as executive functionaries in the business’ hierarchy.
An attorney for Grahl says that Circle K changed its overtime policies shortly after the collective action was filed in 2014.
The exact terms of the settlement have yet to be hammered out. It’s still unclear how much overtime pay compensation each worker will receive. Court records show that Charles Grahl will receive an award of $15,000 for his role as the case’s representative plaintiff, but his total compensation package will be larger once his unpaid overtime wages are calculated.