Sterling Jewelers Agrees to Settle California Wage and Hour Lawsuit for $1.5 Million

Sterling Jewelers Inc. will pay a $1.5 million class action settlement regarding allegations the company broke California wage and hour laws.

Both the company and the approximately 3,800 employees and former employees requested a California federal judge to approve the proposed settlement to resolve allegations workers were denied sufficient overtime pay, regular wages, and meal breaks.

If approved, the settlement money would be used to pay $75,000 in penalties under California’s Private Attorneys General Act, a maximum of $50,000 in administrative fees, and a $10,000 incentive award for the lead plaintiff. Attorneys’ fees could equal one-third of the settlement and litigation costs could top out at $15,000, according to the motion.

The remaining amount of the $1.5 million settlement would provide monetary relief to Class Members, who include current and former California employees who were paid hourly and on a commission basis from Nov. 28, 2013 to the present, according to court documents.

Sterling Jewelers was sued by the workers in November 2017 in a California state court, but the court was removed to federal court in December 2017.

Employees alleged they were not provided uninterrupted 30-minute meal periods — a violation of California wage and hour laws. They also claimed Sterling did not calculate their regular rate correctly to determine an accurate overtime wage. Those workers who left the company accused Sterling of failing to pay them the bonuses or commissions they had earned prior to their departure. Sterling Jewelers denies all allegations.

Sterling Jewelers Inc. is a subsidiary of Signet Jewelers Ltd., the world’s largest retailer of diamond jewelry. The company operates almost 3,600 jewelry stores under the name brands of Kay Jewelers, Zales, Jared The Galleria of Jewelry, H. Samuel, Ernest Jones, Peoples, and Piercing Pagoda. According to the company’s website, Signet’s annual sales is around $6 billion.

California Wage and Hour Laws

According to California laws, the amount paid for overtime is based on the regular rate of pay.

“The regular rate of pay includes a number of different kinds of remuneration, such as hourly earnings, salary, piecework earnings, and commissions. In no case may the regular rate of pay be less than the applicable minimum wage,” says the California law.

Any non-discretionary bonus should be included in determining the regular rate of pay, too, when the bonus is compensation for hours worked, worker productivity or proficiency, or provided as an incentive to stay employed by the same employer.

California break laws mandate that non-exempt employees are allowed a 30-minute off-duty break for lunch if they work more than five hours in one workday. A second 30-minute meal break must be given to any employee who works more than 10 hours in one workday. In addition, employees are entitled to a 10-minute break for every four hours worked.

The California Wage and Hour Lawsuit is Case No. 2:17-cv-09301, in the U.S. District Court for the Central District of California.

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