Urban Outfitters Hit With Wave of Individual Overtime Lawsuits

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By Jon Steingart

Urban Outfitters Inc. owes a former retail department manager overtime because it gave him non-managerial assignments, he says in a complaint.

This lawsuit is one of many individual claims that have been filed against the company following a magistrate judge’s recommendation to decertify a collective action in which about 200 department managers said they’d been deprived of overtime under the Fair Labor Standards Act. A federal judge adopted the magistrate’s recommendation Sept. 6. Since then, multiple individual lawsuits have followed.

“The only people these companies are helping are big firm management lawyers when they force individuals to prosecute their claims alone,” Justin Swartz, a partner with Outten and Golden LLP in New York, told Bloomberg Law Nov. 3. He represented the department managers in the collective action and now represents some of them in individual lawsuits, including Aaron Babb. A collective action is a procedure for litigating FLSA cases with multiple plaintiffs that’s similar to a class action.

“Collective actions and class action have a lot of important purposes. One of them is protecting defendants so they only have to defend once,” Swartz said. “If what they’d rather do is address claims head on and either win or lose, then maybe they should be thinking a different strategy.”

Babb filed his case Nov. 3 in the U.S. District Court for the Southern District of New York ( Babb v. Urban Outfitters, Inc. , S.D.N.Y., No. 1:17-cv-08526, complaint filed 11/3/17 ). At least three other department managers filed similar lawsuits the same day. At least 18 department managers have filed individual lawsuits against Urban Outfitters since the collective action was decertified, according to a Bloomberg Law review of federal court records.

Urban Outfitters contended in the collective action that department managers exercised a sufficient degree of independent decision-making in running their stores that would exempt them from the FLSA’s overtime requirement. Lawyers that represented the company in the collective action didn’t immediately respond to requests for comment Nov. 3.

The Fair Labor Standards Act generally requires time-and-a-half pay for hours worked beyond 40 in a week, but it exempts managers. Whether someone qualifies as a manager is determined by the job duties she performs, rather than the title she holds. To be considered a manager under the FLSA, someone must be engaged in decision-making that affects the business, direct the work of others, and possess authority to hire and fire.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bna.com

To contact the editor responsible for this story: Terence Hyland at thyland@bna.com

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