Popeyes Faces Lawsuit Over Overtime Pay and Pandemic-Related Labor Changes

On July 24, 2023, the Honorable Lisa G. Wood of the United States District Court for the Southern District of Georgia denied a summary judgment bid filed by Sailormen, Inc. (“Defendant”), the owner of a chain of Popeyes Louisiana Kitchen (“Popeyes”) restaurants in Florida and Georgia. The lawsuit concerns allegations that Defendant mishandled overtime payments and benefits for store managers during the COVID-19 pandemic, highlighting the complexities of labor laws during unprecedented circumstances.

In January 2022, Taletha Crayton (“Plaintiff”), a Popeyes store manager, filed a complaint alleging that Defendant violated the Fair Labor Standards Act of 1938 (“FLSA”) by improperly denying her overtime pay during the pandemic. Plaintiff claimed that prior to the pandemic, her role entailed only minimal non-exempt duties. However, COVID-related staffing shortages led to a significant shift in her job responsibilities, and Plaintiff was forced to take on non-exempt duties including working at the “back station” as a “batter person.” Plaintiff estimated that these non-exempt tasks made up 75% of her work for a period of eight months. Plaintiff alleged she was consistently working 60 to 65 hours per week during this time but did not receive overtime pay. When she attempted to address these issues with higher management, Plaintiff was placed on probation and ultimately terminated in November of 2021.

In July 2020, the U.S. Department of Labor (“DOL”) issued guidance that circumstances stemming from the pandemic could potentially be classified as emergencies under the FLSA. As a result, employees typically exempt from overtime pay, such as store managers, could temporarily be assigned non-exempt tasks without losing their exempt status, so long as they continued to receive a consistent salary. However, the duration of this “emergency exemption” remains a gray area in the DOL guidance. According to the Court, where plaintiffs “were repeatedly expected to perform nonexempt work, courts have found that the emergency exemption does not apply.” In Plaintiff’s case, the Court found that performing “extra work due to the pandemic for about eight months…could be considered a routinely performed act…falling outside of the emergency exemption.”

While Plaintiff’s pre-pandemic role, which was comprised of managerial responsibilities such as hiring and firing, appeared to meet the criteria for overtime pay exemption as defined by the FLSA, the Court ultimately concluded that numerous unresolved factual disputes made the case inappropriate for resolution at the summary judgment stage.  Instead, whether these exemptions persisted beyond the pandemic will be a matter for a jury to decide.

Updates will be posted to this blog as the matter progresses. The case caption is Crayton v. Sailormen Inc., No. 2:22-cv-00004, filed in the United States District Court for the Southern District of Georgia.

The legal team at Miller Shah LLP has extensive experience representing wage and hour violation matters. If you have any questions regarding this subject or this post, please contact Casey Yamasaki (ctyamasaki@millershah.com) or Anika Keuning (askeuning@millershah.com). The Firm can also be reached toll-free at (866) 540-5505.