A labor-law class action filed against Big Lots (Johnson v. Big Lots) for alleged violations of the federal Fair Labor Standards Act (FLSA) has important consequences for retailers nationwide. First, the lawsuit appears to be the only complete trial involving assistant store managers in a collective action; second, and most significant, it also appears to be the only case where the court has “decertified” (reversed) a collective action following trial, but before a final decision on the case has been rendered.
In 2004, two Big Lots assistant store managers filed a lawsuit in Louisiana against the retailer, which operates some 1,400 stores in 46 states. The plaintiffs alleged that the Columbus, Ohio-based chain had misclassified them as exempt and therefore owed unpaid overtime for hours worked over 40 in a work week.
But because the plaintiffs also claimed that thousands of current and former Big Lots employees could be impacted by the supposed misclassification, the case made headlines. And it brought Big Lots face to face with huge potential liabilities.
Chain Store Age talked with Paul Bittner, an attorney with Columbus, Ohio-based Schottenstein, Zox & Dunn, which defended Big Lots at trial and helped secure what ultimately would be a landmark decision for retailers.
“Once the original case was filed in Louisiana in 2004, the plaintiffs sought from the court a preliminary determination that the case should be treated as a collective action,” Bittner said. A collective action, he explained, is distinct from a class action in that participants have to opt in to the collective action, whereas, in a class action, “you have to opt out or your claims are automatically a part of the action.”
After a look at the collective-action argument, which contended that all Big Lots assistant store managers across the country were misclassified as exempt, the judge agreed with the plaintiffs and ruled that the case would go forward as a collective action.
“This gave the plaintiffs an opportunity to invite others to join the action,” Bittner said. “About 940 people—both current and former Big Lots assistant store managers—joined.”
Nearly three years since the initial filing, in August 2007, the judge denied Big Lots’ motion to decertify the collective action. Big Lots was faced with a daunting decision: settle the