GameStop facing employee lawsuits

Store managers say they didn't actually manage anything and should have been eligible for overtime pay.


It's no secret that the people who make games often put in time above and beyond the 40-hour work week. Publishers like Electronic Arts and Activision have faced employee lawsuits over the matter, and now the people who sell games are going to court over their own overtime issues.

According to court records, specialty retailer GameStop is facing a collective-action lawsuit brought against it in Louisiana by a half-dozen of its store managers. In April, the six alleged that they were wrongfully declared exempt from overtime regulations of the Fair Labor Standards Act (FLSA) and were required to work "in many occasions, in excess of 50 or 60 hours per week."

While the FLSA does state that those "employed in a bona fide executive, administrative, or professional capacity" are exempt from its overtime regulations, the store managers contend that they had no such authority.

According to the suit, "All store managers are required to follow, in precise detail, the store operations manual which dictates the procedure for operation of the retail establishment. ... The job of store manager requires virtually no actual management of employees or exercise of discretionary function."

For example, the plaintiffs say GameStop decided how much to pay the store staff, made all pricing decisions, decided what (and how much) to stock, where items would be placed on shelves, and how they would be promoted. The suit also says store managers couldn't even hire or fire their own employees, that power being reserved for district managers.

The plaintiffs say GameStop willfully violated the FLSA in their cases, as well as in those of US store managers across the company. They have asked the court to let all those who have been similarly wronged by GameStop since April of 2003 opt into the collective-action lawsuit. They are seeking damages with interest to compensate them for unpaid overtime and an award of their attorneys' fees.

GameStop has responded to the suit by asking the judge to throw the case out because of its similarity to a 2004 lawsuit about unpaid overtime, which is still pending. That case, brought against the company in New York by an assistant store manager, was filed on behalf of all Electronics Boutique employees since 1998 who were denied minimum wages or overtime pay. That legal proceeding began before Electronics Boutique merged with GameStop last year.

While the New York suit's claims of employees wrongfully declared exempt from overtime pay are similar, it goes into greater detail on the company's practices. The suit says Electronics Boutique didn't pay for opening or closing the store, didn't provide or pay for a meal break, and instructed the falsification of payroll records to avoid giving anyone overtime. It also alleges violations of New York's own labor laws.

In May, the parties involved in the New York suit told the court they were in the preliminary stages of negotiating a settlement. The judge in the Louisiana suit has not yet ruled on GameStop's request to have the case thrown out, postponed, or moved to New York so the same court can host both suits.

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