CKE Restaurants Inc.'s Carl's Jr. agreed to pay $9 million to settle claims that some former and current restaurant managers in California weren't paid overtime, the company said.
The company will take a $7-million charge, or 10 cents a share, in the second quarter of 2005 to increase its reserves to the settlement amount, Carpinteria, Calif.-based CKE said Friday.
CKE was accused in the lawsuit of improperly classifying some restaurant managers as exempt from the federal Fair Labor Standards Act, which requires overtime pay for workers after 40 hours of work per week. CKE will make a cash payment to cover employee claims and legal fees. The settlement is subject to court approval.
"While the company denies all liability in these cases, it has agreed to the settlement in order to resolve all of the plaintiffs' claims without engaging in expensive, distracting and protracted litigation," CKE general counsel Robert A. Wilson said.
CKE fell 60 cents to $13.02 on the New York Stock Exchange.