Justices allow $35 million verdict against Family Dollar Stores to stand

By Chris Rizo | Oct 5, 2009

U.S. Supreme Court building

WASHINGTON (Legal Newsline)-A $35 million judgment against Family Dollar Stores Inc. over not paying store managers overtime pay will be allowed to stand.

The U.S. Supreme Court on Monday rejected the retailer's appeal, which argued that its store managers were salaried employees, not eligible for overtime time under federal law.

But managers said that while they performed some administrative functions they spent most of their days doing the same work as hourly employees.

The Matthews, N.C.-based retailer also argued that the case should not have been allowed to proceed as a class action. More than 1,420 managers joined the class.

In a statement, the retailer said the company expects that the Supreme Court's decision not to hear its appeal "will not have a material impact on its financial condition, as it believes it has appropriately reserved for this contingency."

At a 2006 trial, a jury ruled for the class and entered a $ 35.6 million judgment against the company. Last year, the 11th U.S. Circuit Court of Appeals upheld the judgment. With interest, the judgment stands at more than $41 million.

"The jury reasonably determined that Family Dollar failed to meet its burden of proving that Plaintiff store managers' primary duty was management," Appeals Court Judge Frank Hull wrote for a three-judge panel.

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