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Defendent Misclassification Case Study

RadioShack Corporation (Various Individual Cases)

Case Details

RadioShack Corporation was facing several class action lawsuits for alleged wage and hour violations under various state and Federal regulations. The lawsuits claimed that RadioShack Store Managers were improperly classified as “exempt” from overtime pay because they spent the majority of their time performing non-exempt (non-managerial) tasks and lacked the level of discretion and authority required to qualify for the executive exemption. Lamorinda was retained by defense counsel to study the tasks and activities performed by Store Managers in RadioShack stores. To accomplish this we conducted a job analysis of the Store Manager position using two scientific data collection methods: a job analysis questionnaire and time and motion observations.

Our Study

• Reviewed company documents to gain a thorough understanding of store operations.
• Interviewed RadioShack employees who were familiar with store operations and the Store Manager position and several incumbents to learn about the tasks performed by Store Managers.
• Developed a customized, detailed, and scientifically sound job analysis questionnaire for the Store Manager position at RadioShack.
• Conducted questionnaire reviews with numerous RadioShack employees to ensure accuracy.
• Pretested the questionnaire with a group of incumbents before it was finalized.
• Administered the questionnaire to a sample of managers in different states around the country.
• Shadowed Store Managers on the job as they performed their work and documented each task they performed.
• These tasks were categorized based on content and then aggregated by manager to determine how the manager’s time was spent.

Results

Both the questionnaire and observation study demonstrated that Store Managers spent a significant percentage of their time performing exempt work and varied in the way they performed it. Results of the analysis of Store Manager involvement in important functions revealed that Store Managers had significant authority to make many decisions and made these decisions frequently.

The results of this project were used by defense counsel in several wage and hour violation cases against RadioShack across the country and had a significant impact on the outcomes. Dr. Banks testified in trial regarding the findings of our study in the Goldman v. RadioShack trial in Pennsylvania. At trial, Dr. Banks carefully explained the details of the study and study results, enabling the jury to fully understand the scientific rigor with which the study was conducted and the meaningfulness of Store Managers’ reports of time spent. After four hours of deliberation, the jury decided in favor of RadioShack. As a result of this verdict, plaintiffs withdrew four similar class actions pending in other states.