Neiman Marcus Could Owe Salespeople $1.5 Million

Several thousand past and present employees at Neiman Marcus’ five department stores in California could be in line for reimbursements in connection with a sales commission policy that violated state law.

The reimbursements, which could total as much as $1.5 million, stem from a since-abandoned policy that required salespeople to absorb commission costs associated with merchandise returned without sales slips.

Neiman Marcus dropped the policy, known by employees as the “777” payroll adjustment, in 1992. But a settlement approved May 3 by a state Superior Court judge in San Francisco requires the Dallas-based chain to reimburse California employees for deductions made between 1986 and 1992, when the policy was in effect.

Neiman Marcus executives on Friday declined to say how many current and former employees qualify for reimbursements or how costly the court-approved settlement would be.

Retail industry experts were unable to say if the May 3 settlement of a 1989 lawsuit brought by a former Neiman Marcus employee might prompt similar reimbursements by other retail chains or if Neiman Marcus stores in other states might face similar court orders.

Attorneys representing Kirby Hudgins, the former Bay Area department store employee, maintain that the settlement could cost Neiman Marcus as much as $1.5 million if every eligible employee seeks a reimbursement.