Illinois District Court Holds that Termination is Not a Wage Reduction under FMLA

We here at Lubin Austermuehle have extensive experience as Joliet overtime class-action lawyers and are constantly scouring the federal court dockets in Illinois for cases that may help our practice. One particularly instructive opinion was issued by the Northern District of Illinois, Eastern Division earlier this year in Ottaviano v. Home Depot Inc.

In Ottaviano v. Home Depot Inc., the Plaintiff employees worked for Home Depot as assistant store managers, and allege that they and their fellow class members were misclassified as exempt employees. Plaintiff’s claimed that Defendant’s misclassification was intentional for the purpose of circumventing the Illinois Minimum Wage Law (IMWL). Defendant Home Depot denied the claims and filed to dismiss the action through a motion for summary judgment.

The named Plaintiffs had worked for Defendant between approximately two to six years, and had worked well in excess of forty hours per week during the entirety of their employment. During the time that the Plaintiffs worked for Home Depot, they were paid a salary and were required to work fifty-five hours a week. Home Depot requires that all assistant store managers (ASM), including Plaintiffs, go through a training stage for two to eight weeks before they are deemed to be a qualified and capable ASM able to fulfill the responsibilities required for the position. The trainee ASM’s are classified as exempt by Defendants and are paid a salary during this period. Defendant has a universal policy of scheduling its ASM’s for fifty-five hours per week, and Home Depot terminates assistant store managers who fail to work the hours they are scheduled.

Plaintiffs filed their class action alleging that they were owed overtime for the training period and for every other week of their employment with Home Depot. Plaintiffs contended that Defendant’s policy of terminating ASM’s who do not work fifty-five hours a week is effectively a wage reduction under the Federal Labor Standards Act (FMLA). Plaintiffs also argued that under the salary-basis test, any employee whose wages can be reduced by their employer is non-exempt. The Court did not find Plaintiffs’ arguments persuasive, and in dismissing the claims Judge Dow cited a U.S. Supreme Court ruling that true exempt employees are disciplined by terminations, demotions, or restricted work assignments, as the Plaintiffs were, instead of wage deductions. The District Court went on to say that employers are permitted to set requirements for the overall number of hours worked by their exempt employees. Finally, the Court granted summary judgment to dismiss the overtime claims for the training period because they were barred by the applicable statute of limitations.

Lubin Austermuehle has a team of Skokie wage and hour attorneys who focus on nationwide class action lawsuits and who have successfully handled many sizeable wage and hour disputes. Our Chicago overtime lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Employers often misclassify employees as exempt from overtime laws in order to avoid paying overtime wages. When you do not receive the wages you should, a lawsuit can help to recover the overtime wages that are rightfully yours. Lubin Austermuehle is based in Chicago, and represents clients throughout the country who have not been paid their overtime wages. If you believe that you are owed overtime wages, contact one of our Chicago wage and hour attorneys by phone at 1 630-333-0333, or through our online form.

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