Question
“Case Questions 1. What could Starbucks have done to be sure that its prohibition against off-the-clock work was enforced? 2. Why does the Court consider it important that Starbucks did not increase store budgets when it reclassified the ASMs as nonexempt?” Make sure you go into detail as to the “why” in your comments.
CASE 12.2 Falcon, et al. v. Starbucks Corporation, 580 F. Supp. 2d 528 (S.D. Tex. 2008) FACT SUMMARY Starbucks operates more than was a strong showing that (I) ASM job duties were 6,500 retail coffee stores in the United States. Each ot easily completed within 40 hours, while overtime store is staffed by "partners" including entry-levelw strongly discouraged, (2) labor budgets were not baristas, shift supervisors, assistant store managers increased, and (3) manager bonuses were based, in (ASMs), and store managers. In October 2002, Star part, on limiting overtime hours. Despite an official buckschanged the job description for ASMs to include "ime worked is time paid" policy, Starbucks created routine tasks, including service, cleaning, and other an environment that encouraged FLSA violations. A nonmanagement tasks, and reclassified them for pur- Policy of discouraging overtime, while not unlawful, poses of the FLSA from "exempt" to "nonexempt." could, together with other factors, lead to a consistent This made all ASMs throughout the country eligible for pattern of violations overtime. Although Starbucks anticipated that ASMs would continue to work more than 40 hours after the ORDS OF THE COURT: Motivation to Violate reclassification, it did not increase store labor budgets tho-FLSA "Plaintiffs have also provided significant evidence in support of their claim that [they] either worked off-the-clock or had time shaved off of their høurs by Store Managers when they attempted to record all of the hours they actually worked. Finally Plaintiffs have made a strong showing that Starbucks general policy of requiring ASMs to perform job duties that could not easily be completed within and store managers were discouraged from allow ing workers overtime. Several ASMs contended that the new job responsibilities could not be completed in 40 hours and that Starbucks managers enforced an unwritten policy of work "off the clock" (perform the job responsibilities without being compensated) in order to control over- time costs. One ASM testified that a district manager informed her that her job needs to get done regard less of how long it takes." Falcon and other ASMs filed encouraging or allowing ASMs to 40 hours while, at the same time, strongly discour aging overtime after the reclassification, failing to increase labor budgets, and basing bonuses, at least ng that Starbucks violated the FLSA. Star-part, on labor hours created an environment that bucks contended that it had a written policy prohibit ing off-the-clock work and filed a motion for summary atCeast strongly motivated managers to commit the alleged FLSA violations. Case Questions hat could Starbucks have done to be sure that ts prohibition against off-the-clock work was SYNOPSIS OF DECISION AND OPINION The federal district court ruled in favor of Falcon and denied Starbucks's motion for summary judgment. The court held that significant evidence showed that 2. Why does the court consider it important that Star either ASMs worked off-the-clock or time was taken off if they attempted to record all of their hours. There sified the ASMs as nonexempt? bucks did not increase store budgets when it reclas
Explanation / Answer
1.In order to enforce its prohibition against off-the-clock work, Starbucks should have ensured enough number of resources in the organization to complete the extra work without working overtime. The store labor budget should have increased to hire more employees or to compensate the employees with overtime pay who work more than forty hours in a week. The management bonuses also should be based on employee satisfaction and productivity instead of limiting the overtime hours.
2. While classifying the employees as nonexempt, the employer needs to compensate the employees for each hour they work more than 40 hours in a week. It is a clear violation of FLSA to classify the employees as nonexempt without increasing the store labor budget because the managers will not be able to pay the employees for the extra hours without enough funds. They will have to manage the payment with the available funds ignoring the extra effort taken by the employees to complete the work. Hence the court considers it important that Starbucks did not increase store budgets when it reclassified the ASMs as nonexempt.
