Alleged Misclassification of Managers Resolved with $1.1M Settlement

An operator of  T-Mobile retail locations has recently agreed to a putative class action settlement after being accused of misclassification of managers.

According to the putative wage and hour class action lawsuit, defendant TCC Wireless had purposefully conducted misclassification of managers to avoid paying them overtime.

An Illinois federal judge recently granted preliminary approval for the putative class action settlement in the amount of $1.1 million, to resolve numerous claims of employment misclassification of managers.

Plaintiffs Jonathan W. and Margaret H. are leading the wage and hour class action lawsuit, who worked as managers at TCC Wireless retail locations in Illinois. According to Jonathan and Margaret, they were allegedly misclassified as exempt from certain legal protections after being hired as managers or assistant managers.

Overview of Wage and Hour Class Action Lawsuit

Before they filed the wage and hour class action lawsuit, Jonathan and Margaret earned approximately $36,000 and $32,500 respectively on an annual basis. Both claim they regularly worked about 55 hours per week, without receiving overtime wages allegedly due to the misclassification of managers in the company.

Even though Jonathan and Margaret hold the titles of managers, they frequently worked alone or only had one other employee in the store with them. Based on the occupational duties they had to perform on a regular basis, Jonathan and Margaret allege TCC Wireless deliberately conducted misclassification of managers against them and other employees.

According to their occupational duties, Jonathan and Margaret argued they should be classified as typical, non-exempt minimum wage employees under the Fair Labor Standards Act (FLSA). Under the FLSA, an employee may be exempt from minimum wage benefits if, for example, they hold executive authority and responsibility over other employees and make at least $23,600 a year or $455 a week.

TCC Wireless allegedly conducted misclassification of managers to avoid paying them overtime, which is 1.5x the employee’s hourly rate. U.S. Magistrate Judge Maria Valdez is overseeing the putative class action settlement, stating the terms of the agreement are fair and that they accurately point out the alleged violations against Illinois state labor laws as well as federal.

“The settlement of the Fair Labor Standards Act collective action is approved as a fair, equitable, and reasonable resolution of a bona fide dispute in this contested litigation,” Judge Valdez said.

Jonathan and Margaret’s putative wage and hour class action lawsuit applies to managers and assistant managers who worked at an Illinois TCC Wireless location between July 25, 2014 to Sept. 8, 2017, as well as opt-in plaintiffs who worked as managers in a TCC Wireless store in different state.

Approximately 348 people eligible for different cuts of the class action settlement, with Jonathan and Margaret requesting awards of $5,000 and $7,500 respectively for their roles as lead plaintiffs. The settlement fund will also be used to cover litigation costs.

This Misclassification of Managers Class Action Lawsuit is Case No. 1:16-cv-11663, in the U.S. District Court for the Northern District of Illinois.

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