On October 29, 2014, NELA joined the National Employment Law Project (NELP) and other organizations to request leave to submit an amicus brief in support of plaintiffs-appellants in Marzuq v. Cadete Enterprises (d/b/a Dunkin’ Donuts), No. 14-1744, pending in the U.S. Court of Appeals for the First Circuit. The issues in this case fall within NELA’s amicus priority of confronting wage theft and compensable time violations. Plaintiffs are represented by NELA member Shannon Liss-Riordan, Lichten & Liss-Riordan, P.C. (Boston, MA). The amicus brief was drafted by NELA member Peter Winebrake, Winebrake & Santillo, L.L.C. (Dresher, PA), and Anthony Mischel of NELP.
Plaintiffs, former managers at Dunkin’ Donuts stores, are seeking overtime wages under the Fair Labor Standards Act. Managers are expected to work 48 hours per week and often work more than 60 hours. Conversely, hourly employees are prohibited from working extra hours. The issue is whether the managers, who spend most of their work day performing the same work as the hourly employees, including serving customers, were misclassified as exempt employees and entitled to overtime pay. As is common in the fast food industry, the managers did not earn much more than the hourly employees.
Defendants moved for summary judgment and the magistrate judge recommended that the motion be denied. The district court rejected the recommendation and granted summary judgment, holding that no overtime was owed because, under Donovan v. Burger King, 672 F.2d 221 (1st Cir. 1982), the undisputed facts showed that the plaintiffs’ primary duty was management. The court said this case was virtually indistinguishable from Burger King, which held that the managers were exempt solely because they were “in charge” of their stores. The court found that the Marzuq “[p]laintiffs did spend much of their time, when necessary, serving customers like normal hourly employees. However, they were still managing the store, even while performing such tasks.” The challenged decision affects many workers who although given the title of manager, have little real authority, are paid a low salary, and receive no overtime pay.
Amici argued in the brief that the FLSA’s overtime provisions were enacted to benefit all workers by spreading work and reducing unemployment. The FLSA effectively requires employers to pay a penalty or premium for relying on fewer workers to do the work and requiring overtime hours. Defendant’s business practice of misclassifying low salaried managers as exempt and requiring them to perform non-managerial duties allows it to avoid hiring additional hourly employees or paying its current hourly employees overtime to perform this work. This business model is contrary to Congress’ intent that overtime pay operate as an economic incentive to employers to spread work hours among the entire workforce. Defendant’s practices thus harm not only the plaintiffs, but all of its current and future hourly employees. The FLSA protections are particularly important to workers in the fast food industry. Finally, the district court’s failure to analyze carefully the four “primary duty” factors, and instead relying Burger King to find that the Dunkin’ Donuts managers were exempt solely because they were “in charge” of their stores, is inconsistent with the FLSA’s fundamental mandate of spreading work among the entire workforce.