Duane Reade, the largest and most recognized drugstore chain in the New York Metropolitan area, has agreed to pay $13.5 million to settle a class action lawsuit claiming that the store didn’t pay overtime wages to Assistant Store Managers (“ASM”), in violation of the Fair Labor Standards Act. The lawsuit claims that despite a previous 2009 settlement in which Duane Reade agreed to stop classifying its ASMs as exempt from overtime pay, the company did not actually make any changes to its policies. Therefore, ASMs at Duane Reade locations have allegedly continued regularly working more than 55 hours per week without receiving any overtime compensation.
The lawsuit contends that ASMs were classified as exempt “executives” and not paid overtime for all hours worked over forty per workweek solely because of the title of their positions. The ASMs say they did not have managerial authority to control the work of other Duane Reade workers, and that their duties consisted almost entirely of completing non-exempt work, including stocking and organizing shelves, unpacking boxes, stacking merchandise, cleaning, taking out the garbage, and performing customer service. ASMs’ primary job duties did not include hiring, firing, scheduling, or disciplining other Duane Reade workers, and were similar to the duties of sales clerks paid by the hour.
The two settlements combined will pay out $13.5 million to about 1,075 workers who were employed as ASMs at Duane Reade locations since 2009. This is the third time in seven years that Duane Reade has been sued for misclassifying their ASMs as exempt under state and federal laws and failing to pay them overtime wages.