Big Lots to Settle Federal Wage and Hour Lawsuit for $7M

Specialty closeout retailer Big Lots has agreed to pay $7 million to settle a federal wage and hour lawsuit brought by workers. Viola H., a former employee at a greater Los Angeles area Big Lots store, filed suit in 2014. At the time of the proposed settlement agreement in early December, she was one of four named plaintiffs, each of whom is expected to receive an incentive award: $15,000 for three of the plaintiffs and $10,000 for the fourth.

The Big Lots federal wage and hour suit was filed in the U.S. District Court for the Central District of California. The employees’ allegations centered around Big Lots’ policy of having workers clock out after their shifts but requiring them to remain locked in the store until security checked each employee’s personal belongings. Only when security gave the OK could the stores’ door alarms be disarmed and the workers dismissed.

The policy purportedly kept the employees from operating under their own volition and often came with the expectation that they would work “off the clock.” The lack of seating available in the waiting area encouraged this protocol, according to the suit. The suit also alleged unpaid overtime, unpaid minimum wages, meal, and rest period violations and failing to pay wages in a timely manner.

Big Lots has changed its procedure for how employees clock out. The company will now pay its workers during clock-out time and will provide ample seating in its “off the clock” waiting areas.

In the meantime, the settlement will compensate each of the 31,500 current and past Big Lots cashiers who have opted to participate in the lawsuit an average of $126. Part of the $7 million settlement calls for Big Lots to pay $2.33 million in attorney fees and $500,000 in court costs.

Headquartered in Columbus, Ohio, Big Lotsoperates more than 1,400 stores across 47 states, according to Wikipedia.

A Long Road

U.S. District Judge John Kronstadt certified the unpaid wage claim class action in May 2017. The decision was reversed the following year when it was discovered that employees’ average waiting time was just three minutes, too little to justify litigation. Then in July, Judge Kronstadt determined potential liability on the retailer’s part for keeping employees under the store’s control after they’d clocked out.

Retail Wage and Hour Violations

Retail is one of the leading sectors for minimum wage violations, according to demos.org.  Requiring sales floor clerks to work off the clock or through meal periods is more pervasive in retail than the failure to pay the expected minimum wages. These policies violate federal and state laws and amount to wage theft. According to demos.com, employers stealing pay they owe to workers “is equivalent to the value of all merchandise lost to shoplifting nationwide.”

“By paying less than the legal minimum wage, employers steal an estimated $15 billion every year,” the report states. “This compares to an estimated $14.7 billion lost annually to shoplifting.”

Thousands of wage and hour lawsuits have been filed.

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