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CVS Assistant Managers Win Class Status In OT Case

Law 360 - Erin Coe

Law360, New York (August 06, 2010) -- A federal judge has conditionally certified a class of current and former assistant store managers of CVS Caremark Corp. who are accusing the drugstore chain of failing to properly pay overtime.

Judge Paul A. Crotty of the U.S. District Court for the Southern District of New York on Thursday granted the workers’ bid for a conditional collective action under the Fair Labor Standards Act and shot down a bid by CVS to throw out their state law claims.

The group, led by former CVS Assistant Manager Reinaldo Cruz, sued CVS in September, accusing the pharmacy giant of violating the FLSA by deliberately misclassifying them as “executives” so that it could avoid paying them overtime compensation. The suit also asserts claims under the overtime laws of Massachusetts, Michigan, New Jersey, New York, North Carolina and Pennsylvania.

CVS is the largest retail pharmacy chain in the U.S., with 6,900 stores, and the plaintiffs want to include past and present assistant managers from stores nationwide in the suit. The plaintiffs indicated earlier that if their motion was approved, the number of potential class members could swell by tens of thousands.

In arguing against the certification motion, CVS claimed that the variances in the assistant managers’ job duties demonstrated that they were not similarly situated, but the judge determined that a fact-intensive inquiry was inappropriate at the notice stage, finding the plaintiffs similarly situated and granting the collective action bid.

The judge noted that the plaintiffs showed that the company requires assistant managers to partake in a uniform training program used nationwide, compensates them with a weekly wage that does not increase with completed overtime hours, and subjects them to the same work rules and assigns them the same job duties as nonexempt workers.

CVS also fought class certification of the state law claims, arguing that the variations among the state laws should defeat the predominance requirement.

The district court disagreed, saying the variations in the claims were minor and would not undermine the court’s ability to manage the six subclasses and that the plaintiffs were entitled to discovery on the issue.

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 “The order is a great victory for these workers,” said Justin M. Swartz, an Outten & Golden LLP attorney who is representing the plaintiffs. “It will allow CVS assistant managers across the country to have a chance to protect their rights, and we hope it will send a message to retail chains across the country that they should pay their workers overtime.”

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The assistant managers receive fixed salaries but routinely work more than 55 hours each week, according to the suit.

Though the company classifies them as “executives” exempt from overtime pay, the assistant managers spend most of their time shelving merchandise, working registers, unpacking boxes, unloading trucks and taking out trash, for example — rather than performing managerial duties, according to the suit.

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