Big Lots to Settle Overtime Pay Suit
Big Lots Inc., one of the nation’s largest closeout retailers, will pay $10 million to settle claims by 1,451 California store managers that they were improperly denied overtime pay -- the latest in a wave of such cases in the last five years.
The settlement ends a class-action lawsuit that accused Big Lots of cheating the managers out of overtime pay by unfairly exempting them from overtime eligibility when they were required to perform clerical and other duties.
“I’m finally being compensated for the overtime I did,” Dana V. Green, a 43-year-old Long Beach man who was a lead plaintiff in the case, said Thursday. Green, who said he expected to receive at least $100,000 from the settlement, alleged that he was hired by the company in 1996 as a manager but spent much of his time unloading trucks and processing freight.
“This is not money being given to me,” said Green, who left Big Lots in 2000 to work for another company. “This is money I earned.”
Under California’s unique wage law, workers classified as managers are eligible for overtime pay at time and a half if they spend more than 50% of their time on nonsupervisory tasks such as stocking shelves or unloading merchandise.
Big Lots admitted no wrongdoing in agreeing to settle the case.
“Obviously we thought it was in the company’s best interest to settle,” said Charles Haubiel, a vice president and general counsel for Columbus, Ohio-based Big Lots, which has 191 stores in California. “The California law is more stringent.”
Class-action overtime lawsuits have swept through the restaurant and retail industries in California in recent years. Most recently, high-tech firms and banks also have been hit with similar suits. In July 2002, RadioShack Corp. said it would pay $29.9 million to settle unpaid-overtime claims by California employees; earlier that year, Starbucks Corp. agreed to pay $18 million to settle overtime claims by 1,000 managers and assistants.
“Companies are paying a lot of attention to this issue and are reclassifying workers,” said Frank Cronin, a labor lawyer with Snell & Wilner in Irvine, a firm that represents employers.
The Big Lots case was originally several cases, some filed against other discount retailers -- such as Pic ‘N’ Save and MacFrugal’s Bargains CloseOuts -- later acquired by Big Lots. The cases, filed in 2000 and 2002, were combined into one class-action suit.
“Employers should pay more attention to the labor code,” said John Quisenberry, a Century City attorney who represented managers in the Big Lots case. “It’s there for a purpose: to protect California’s workforce.”
The recent spate of class-action overtime suits has proved a bonanza for law firms. Under the settlement in the Big Lots case, which was approved by San Bernardino County Superior Court Judge Walter Blackwell on Wednesday, lawyers reaped one-third of the settlement, with $6.75 million set aside for the workers.
Plaintiffs in the case will get settlements based on a complex formula that calculates their time with the company.
Big Lots, which has 1,400 stores and 45,000 employees nationwide, reported profit of $75.6 million for the year ended January 2003 on revenue of $3.8 billion.
The firm reported Thursday that its sales for the four weeks ended Jan. 31 rose 3.7% compared with a year ago, but its same-store sales fell 0.6% during the same period. Shares of Big Lots rose 24 cents to $14.47 on the New York Stock Exchange.
