A North Carolina-based employee has filed a FLSA collective action and a state law class action alleging, among other things, breach of contract, against Foot Locker Incorporated. The Complaint alleges that the Company essentially deprived sales associates, cashiers and stockers from properly due wages and overtime through a systemwide policy and practice of managers altering and changing time records. The case is entitled Kennedy v. Foot Locker Inc., and was filed in the Western District of North Carolina.

As evidence of the necessary commonality, the plaintiffs allege that the employment terms are found in the employees’ written employment offers, the Employee Handbooks disseminated by the Company, its corporate policies as well as other documents. The gravamen of the plaintiffs’ theory is that they were ostensibly required to log work hours into the computer system, but they allege they were prevented from doing so, whether by accident or otherwise.

The Complaint’s most serious allegation is that “managers ... with the knowledge and/or complicity of the company, regularly altered the computerized records .... to reflect a lower number of hours worked by the retail employees.” This was done because managers are under constant pressure to meet labor costs budgets and if they manipulated the time records to show that no overtime was worked and/or fewer hours were worked, they would be within budgetary constraints.

There may be hundreds of employees, current and former, involved in this matter. In a similar case, in which a class was certified in September 2009, approximately 5,200 current or former Foot Locker workers have opted into the action.

The Company’s best defense is to show that this was not a widespread or systemic practice, but, at worst, involved but a few “rogue” managers. The case does highlight, however, the increasing pressure on managers in every industry, but particularly in chain store/franchise situations to stay within imposed labor budgets and what some managers will resort to in order to accomplish that often difficult chore.