Starbucks Managers Accuse Company of Skimming OT Pay

June 9, 2004 ( - Two Starbucks Corp. managers in Florida have brewed up a federal lawsuit alleging the company poured up a double-espresso worth of work and paid a decaf worth of overtime pay.

Sean Pendlebury , manager of a Boca Raton, Florida store, and Laurel Overton, a manager in Deerfield Beach, seek class-action status for managers who worked more than 40 hours a week in the past three years. The lawsuit claims the Seattle-based purveyor of steamy beverages violated federal law by refusing to pay overtime even though only a small amount of their time was spent on managerial work, the Associated Press is reporting.

Dan Levine, an attorney for the two managers says Starbucks incorrectly classified the two workers as exempt under the Fair Labor Standards Act (FLSA), thus exempting the two from receiving overtime pay for time spent working past 40 hours a week. Levine said the salaried managers spent as little as 10% of their time on managerial tasks, such as supply orders.

“This is not about hating Starbucks or accusing them of being socially irresponsible,” said Levine, “This is simply about what we believe is an incorrect classification, which if we’re correct would mean these people have been deprived of overtime pay over the years.”

Levine also plans to pursue class action status for the suit, citing 10 other managers that expressed similar concerns about not being fairly compensated and were interested in joining the suit but did not out of fear of retaliation. The lawsuit did not specify a damage amount.

Starbucks said Tuesday it believes it has “appropriately classified its partners and complies with all applicable federal and state laws.”

Starbucks is no stranger to lack-of-overtime lawsuit. In 2001, the coffee house chain reached an $18 million settlement in another overtime suit by California managers who sued under state wage and hour laws. In fact, many companies have faced complaints from employees alleging they were incorrectly classified as managers in recent year. In 2002 alone, suits were settled by United Parcel Service, Radio Shack Corp, Starbucks Corp, Intel Corp (See Current Worker Sues Intel For ‘Exempt’ Classification ) and Michaels Stores, Inc (See Michaels Settles Back Pay Lawsuit ) for overtime-related cases.

Partly in response to the number of claims in recent years, but primarily to update the 65 year-old FLSA statue, Congress adopted changes to FLSA in April to provide clarity on employee classifications (See DoL Releases FLSA Changes ).