Reference no: EM131851747

Question: You work at an upscale coffee shop that is part of a nationwide chain of 200 such stores. You started as a barista, but then you moved up. Your title is now store manager. You are expected to work 55 hours per week. Your boss says you need to be in the store to get to know the customers and because, well, you are the manager. It is up to you to make sure everything runs smoothly and that there is a great customer experience, which translates into growth in store sales volume and store profit. By the way, however many hours you work, you get paid for 40 hours only (and no overtime pay) because that's right, you are the manager. However, as you think about how you spend your time at the store, you can't help but feel that a lot of your time seems to be spent on things that don't seem much like "management" to you-making coffee drinks, checking supplies, and sometimes cleaning bathrooms. So, this is the life of a manager. It seems a lot like being a barista, except that you work a lot more hours, have more responsibility, and you don't get paid all that much more.

You do spend some time on training other employees and you interview job applicants. But, the district manager is around a lot and she seems to have her own ideas on who to hire most of the time and how to run the store. Plus, there are pretty clear corporate guidelines to be followed on how to run many aspects of the store. The more you think about it, the more you think that it sure would be nice to get paid for working 55 hours. In fact, you have friends who work in other businesses and when they work over 40 hours in a week, they get time and a half for the hours beyond 40. That sounds awfully good. If you are going to spend all of your time at work, it would be nice to at least get paid what you deserve for it. Now, "switch hats" and look at it from the company point of view. Is this company running afoul of the Fair Labor Standards Act (FLSA)? Refer back to our discussion earlier in this chapter.

Would this company be able to document that the store managers are exempt from the FLSA (not to mention similar state laws)? Also, what would it cost to re-classify your store managers as non-exempt? If managers feel overworked and underpaid, what do you project that they will do when the economy picks back up? Is that a concern for the company? Is the company in compliance with the FLSA? What would it cost to have a lawsuit filed against the company? Have other companies in your industry (e.g., Starbucks, Caribou, Peet's, etc.) had any FLSA issues? If so, what can you learn from their experiences? Would you advise meeting with corporate counsel? What facts and observations would you recommend be presented at such a meeting?