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Burlington Coat Left Out in the Cold After Massive FLSA Settlement

After nearly nine years of litigation, Burlington Coat Factory agreed to pay $19.6 million to end a collective action and a putative class action alleging claims for misclassification and unpaid overtime wages.

The cases are Goodman v. Burlington Coat Factory Warehouse Corporations, et al., Case No. 11-cv-4395 (D. NJ.) and Kawa, et al. v. Burlington Stores, Inc., et al., Case No. 14-cv-2787 (D. NJ.)

On July 29, 2011, the Goodman Action was filed in the United States District Court District of New Jersey alleging that Burlington Coat Factory had misclassified its Assistant Store Managers as exempt under the Fair Labor Standards Act (FLSA). Specifically, the Goodman Complaint alleges, “[t]he work performed by plaintiff required little skill and no capital investment. His duties did not principally include managerial responsibilities or the exercise of independent judgment. Rather, they involved many nonmanagerial duties identical to those performance by nonexempt employees entitled to overtime.”

On May 1, 2014, the Kawa Action was filed in the United States District Court District of New Jersey on behalf Assistant Store Managers who worked in California, New York, and Illinois alleging that Burlington Coat Factory misclassified these employees, and, as a result, improperly excluded them from overtime wages.

After the Court granted Goodman’s motion for conditional certification, the parties engaged in extensive discovery, including twenty-eight opt-in depositions, seven depositions of Burlington Coat Factory’s corporate witness, expert depositions, and multiple sets of written discovery. On November 20, 2019, after extensive motions practice and oral arguments, the Court granted Goodman’s motion for final certification of the collective action and denied Burlington Coat Factory’s motion to decertify.

Starting on June 2, 2020, and continuing until June 3, 2020, the parties attended mediation and eventually agreed to resolve the Goodman and Kawa Actions for $19,613,900. The settlement represents an average gross amount of $12,003 for each of the 539 collective members and 1,095 settlement class members.

This case highlights the importance of employers conducting regular audits to determine whether employees are classified correctly, as the consequences can be severe.

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