$12 Million Settles Victoria’s Secret California Misclassification Lawsuit

Victoria’s Secret Stores LLC has agreed to pay a $12 million settlement to resolve a California misclassification lawsuit. According to the California misclassification lawsuit, the lingerie giant had allegedly placed many store clerks and other store employees on “call in” shifts out of standard pay periods to avoid paying full minimum wage.

The lingerie company agreed to pay $12 million to approximately 40,000 class members, consisting of California employees who had previously been classified as exempt from minimum wage and overtime policy.

Since the California misclassification lawsuit was filed, other retail companies have reportedly updated their work policies that require employees to set aside time for a shift that may or may not be confirmed.

Overview of California Misclassification Lawsuit

In the California misclassification lawsuit, sales clerks alleged the company had cheated them out of full minimum wage by scheduling them on “call in” basis.

This forced the employees to compromise their personal lives on a regular basis, due to not receiving notice whether or not they were going to be called in until two hours before the scheduled time. The sales clerks also alleged the lingerie company owed unpaid wages for scheduling shifts and then dismissing the sales clerks after they showed up for shift.

California is one of the most progressive states in the country for minimum wage protections, requiring different business sizes to pay different hourly rates. In 2016 California approved a minimum wage increase based on the size of employer, which was enacted in 2017.

For a business with 25 employees or less, the employer must pay $10 per hour, while employers with 26 or more required to pay $10.50. With these numbers only increasing, employers are also required to pay nonexempt employees overtime rate of one-and-a-half times the regular rate for hours worked over 40 in a single week or over eight hours in a single work day.

State law also requires employers to compensate employees for any missed meal periods or rest breaks, which can be added to their next paycheck. Missclassification is one of the most common ways employers try to get out of paying minimum wage to employees, with on-call work also being allegedly used to deny employees full shifts.

Victoria’s Secret and its employees had reached a settlement agreement, only a few weeks after oral arguments in the Ninth Circuit. The employees had appealed U.S. District Judge George H. Wu’s initial dismissal of their “call in” claims.

The $12 million settlement will cover all cash payments to class members based on how long they worked for the company, higher payments to lead plaintiffs, along with attorneys and other litigation expenses.

This California Misclassification Lawsuit is Mayra Casas v. Victoria’s Secret Stores LLC, Case No. 2:14-cv-06412, in the U.S. District Court for the Central District of California.

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