ANGELES - As companies cut payrolls, managers say the expanding workload
is consuming their lives.
Low-level managers whose long hours on straight salary helped fuel
the economic boom are now trying to settle the score in a tidal wave of
class-action lawsuits charging employers with robbing them of overtime
Despite such titles as store manager or team leader, many workers
say, they spend more time assembling tacos, shoving merchandise onto
display racks and running cash registers than doing anything that
resembles managing the business.
And by borrowing the class-action muscle that pumped up tobacco and
asbestos lawsuits, these white-collar workers are transforming hundreds
of small wage claims into multimillion-dollar suits.
Rite Aid Corp. and U-Haul Co. agreed to settle cases for $25 million
and $7.5 million, respectively, pending final court approval. Neither
company admitted wrongdoing.
WHITE-COLLAR WORKERS say they've earned the money and, after legal
expenses, the settlements aren't making them rich.
``There wasn't a whole lot of life outside working,'' said Robert
McCorkle, a former salaried manager at U-Haul who believes he was paid
less per hour than some subordinates. ``Ten hours was a short day.''
Many white-collar workers, who make up as much as one-third of the
American work force, see themselves as slaves to jobs they blame for
leaving them stressed, worn-out and rarely available for spouses and
children or with little time and energy for other interests.
In every case, the issue is who, as a true manager, can be exempted
from overtime pay?
And who is a manager in title only and therefore entitled to premium
pay for extra work?
``There's a very common misconception that if someone is paid a
salary, then they are not entitled to overtime, which is just simply not
the case,'' said employment-law expert Larry J. Shapiro. ``The key is,
what are their duties?''
IN A CASE with nationwide implications, 2,400 current and former
claims adjusters are demanding overtime pay from Los Angeles-based
Farmers Insurance Exchange. ``Being salaried meant there really was no
start or stop time,'' said Rose Bell, lead plaintiff in the lawsuit.
When Bell interviewed for her job in 1989, she was told she would
work 8 a.m. to 4:30 p.m., she said. But her weeks often hit 60 hours,
said Bell, who is on disability leave. She said bosses blamed her
According to a survey for the court, the typical Farmers adjuster
makes $30,000 a year and works 50 hours a week, said Steven G. Zieff, a
San Francisco lawyer representing the adjusters.
The lawsuit contends adjusters are the equivalent of production
workers and ought to be paid overtime. A judge in Alameda, Calif.,
agreed, and in March an appellate court upheld the ruling.
A hearing is under way to determine what Farmers owes the adjusters.
A Farmers spokeswoman said her company has done nothing wrong. It has
asked the California Supreme Court to hear the case, arguing that it
could ``add dramatically to a current explosion of class-action
IN CALIFORNIA, exempt employees must be paid at least twice minimum
wage, and they must spend more than half their time on exempt duties -
work that is intellectual, managerial or creative and that requires
discretion and independent judgment.
Because adjusters make settlement recommendations, Farmers' petition
said, they should be considered administrators and exempt from overtime
``The benefit to the adjusters is they don't have to `punch a clock,'
but can tailor their work schedules to fit their personal and family
needs,'' the petition said.
Overtime class-action suits have taken off in California, propelled
by favorable laws and court rulings. Many employers, particularly those
with national operations, may not know the rules are tougher in
California, said David Kadue, a Los Angeles employers' lawyer.
``It turns out they've misclassified them,'' he said. ``And then they
find out it's not a matter of making it right for one employee. It's a
matter of hundreds or thousands of employees represented by an
aggressive plaintiffs' lawyer demanding millions on behalf of the
Settlements often are dwarfed by the ongoing expense of paying
overtime to whole tiers of workers previously on straight salary, said
David Lewin, a professor at Anderson School of Management at the
University of California, Los Angeles. ``The consumer ought to
understand that they are going to be paying more,'' he said.
EMPLOYERS WHO ONCE gave little thought to overtime issues are now
consulting lawyers. ``For many years, companies felt that they couldn't
raise prices at all because the competition was too fierce, so the only
way they could make money was to turn out more and more with the same
people,'' said Alec Levenson, a labor economist with the Milken
Institute. ``We're seeing the consequences of that.''
Labor groups are encouraging overtime lawsuits, advising nonunion
white-collar workers nationwide on what the laws are and how to take
employers to court, said Mike Gildea, head of the AFL-CIO's Department
for Professional Employees. ``We believe there is a pretty widespread
epidemic of employers misclassifying workers,'' he said.