Sears Unpaid Overtime Class Action Settlement Has Setback

A Sears unpaid overtime class action lawsuit ran into a roadblock when preliminary approval of the settlement agreement was denied earlier this month. U.S. District Judge Cormac Carney considered some of the claims to be overly broad and contradictory in some areas.

Plaintiff Nikola L. filed this unpaid overtime class action lawsuit on April 8, 2011 against Sears for violations of the California Labor Code and the California Business & Professions Code. Both parties reached an agreement to settle the lawsuit.

The settlement agreement stated that all Class Members “waived and relinquished” the Class-released claims. Class-released claims are essentially the claims made in the unpaid overtime class action lawsuit as well as any claims that could have been made or could later be made based on facts from any of the plaintiffs.

Now, the Class-released claims need to include the allegations made in the original complaint in order to be approved. Originally, in the Sears unpaid overtime class action lawsuit allegations included, “Sears maintained a personal days policy that provided for the forfeiture of vested and unused personal days.”

Carney stated that he could not approve the settlement agreement unless the Class-released claims were narrowed.

Class Action Lawsuits

Sears has a history of unpaid overtime class action lawsuits. One $5 million settlement was paid to Class Members who were allegedly misclassified so that Sears could avoid paying overtime and bonuses. About 700 Sears employees were involved, and Class Members were awarded a minimum $5,000 each (depending on how much overtime was unpaid).

In general, unpaid overtime lawsuits include allegations involving unpaid overtime, unpaid wages, misclassification, missed meals and breaks, and other forms of Fair Labor Standards Act (FLSA) violations.

Employers have been accused of forcing employees to work overtime or off the clock without proper pay and misclassifying employees as “exempt from overtime.” While there are positions that are exempt from overtime, they have certain requirements. An exempt employee must make a certain amount of money, must have a salary, and must be in some sort of position of authority or leadership over others.

Thousands of employees may wrongfully believe that they do not quality for overtime payment. Many later choose to join or file unpaid overtime class action lawsuits.

Unpaid overtime class action lawsuits have cost employers millions. Prudential Insurance Co. of America paid $1.02 million in settlements, and Novartis Pharmaceuticals Corp. paid $99 million.

This Sears Unpaid Overtime Class Action Lawsuit is Case No. EDCV 11-00756, in the U.S. District Court for the Central District of California. 

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