COLTON, Calif. -- Stater Bros. Markets here is being sued by five current and former store managers and assistant managers, who are challenging the company's categorization of those positions as exempt from overtime pay under state labor laws.
Under California law, salaried employees, including store managers and assistant managers, are exempt from overtime pay, while employees who are paid by the hour are non-exempt.
The complaints -- one on behalf of store managers and one on behalf of assistant managers -- were filed in San Bernardino County Superior Court on behalf of a class that could potentially include 200 store managers and 400 assistant managers employed by Stater Bros. since September 1996.
According to the complaints, Stater Bros. required managers and assistant managers to work for up to 60 hours a week and up to four weeks at a time without a day off and to perform many tasks normally assigned to clerical employees, all without overtime pay.
"Over 50% of their working hours [involve] performing the duties delegated to non-exempt employees," the complaint states, "including ... processing film, maintaining equipment, waiting on customers, ringing up sales and other duties of a manual description.
"Due to the staffing needs of each location and the amount of work required to keep each location in operation, class members were and are required to perform the duties of non-exempt employees in order to keep the locations running and to work significant amounts of overtime."
The complaints echo in part a class-action lawsuit against Boise, Idaho-based Albertson's involving alleged off-the-clock work. In an out-of-court settlement late last year, Albertson's agreed to pay a projected $37 million to settle claims by an estimated 150,000 past and present employees; it also agreed to comply with California law, which exempts grocery managers from overtime pay if 50% of their work is supervisory rather than the kind of "grunt" work done by the people they supervise.
The complaints filed against Stater Bros. cited the Albertson's lawsuit as one of several precedents "involving the same issues."
Those complaints seek damages of $45 million on behalf of Stater Bros. store managers and $50 million on behalf of assistant managers, plus restitution of wages the company allegedly retained; payments of premiums and other assessments required by state law; profits traceable to unpaid overtime work, and other sums flowing from Stater's allegedly unfair practices.
They also ask the court to certify the complaints as class actions.
Bruce Varner, an attorney with Varner, Saleson & Dobler, the Riverside, Calif.-based law firm that represents Stater, told SN last week the chain's managers and assistant managers are salaried employees "who are highly compensated. But occasionally they do tasks that are normally done by hourly employees, such as filling in at checkstands so they can get to know customers, which is part of their management duties.
"But they are supposed to manage the store, and a large majority of their duties are not clerical in nature."
He said a check of Stater's employment records showed no problems in the kind of work store managers and assistant managers perform. "Stater is very meticulous in the way it administers employment issues, and our preliminary investigation indicated Stater is in compliance with all rules," Varner said.
He also said that, to his knowledge, the five people who filed the complaints are the only ones contending they were treated unfairly. "All the store managers we've talked to don't seem interested in getting involved. And it would make no sense for them to get involved because if they were put back on hourly wages, they would make less money, even with overtime, than they're earning now.
"It's obvious these complaints are a result of the Albertson's case, and although I don't know all the issues in that case, I know it had different components" than the complaints against Stater.
Those complaints allege that Stater Bros. automatically classifies store managers and assistant managers as exempt employees "[who] are paid a set salary, irrespective of the hours they actually work and the tasks they perform daily. A manager is typically on the premises at all times, a policy that requires them [sic] to work in excess of 8 hours per day.... Most of [Stater's] stores are open at least 10 hours per day, seven days a week.
"It is the policy of defendants to prohibit store managers from authorizing the payment of any overtime to other, non-exempt employees. They are told that, if they authorize overtime, they will be terminated.
"Due to the staffing needs of each location and the tasks and duties required to keep the location up and running, and due to the fact that no overtime is permitted, store managers who are classified as 'exempt' must perform all of the same type of tasks and duties as the non-exempt employees in order to keep the location in operation."
The complaints also charge that Stater's upper management places extreme pressure on store managers "to compensate for the shortage of employees created by the no-overtime policy.... In order to meet the expectations of upper-level management, and in particular the district managers, the store managers have to endure not only long hours, but [also] a workplace wherein they are continuously fearful of getting on the wrong side of the district manager or violating company policy on the use of employees."
According to the complaints, the California Department of Labor's Industrial Welfare Commission presumes that all employees are non-exempt and therefore entitled to overtime pay "unless and until the company establishes that each employee meets the state requirements for exempt status."
However, the complaints allege Stater has "unfairly and/or unintentionally and wrongfully designated all ... store managers ... as 'exempt' in order to avoid payment of overtime wages (and) other benefits" -- a practice that qualifies as an unfair business practice, the complaints indicate.
The complaints seek payment of overtime wages for all affected employees, past and present, plus penalties, attorney fees and costs, plus an order prohibiting Stater Bros. from exempting its store managers and assistant managers who work more than 40 hours a week from receiving overtime pay.