Criminal
Jul. 30, 2002
'RadioShack' Breathes Life Into Unpaid-Overtime Suits
SANTA ANA - A recent appellate decision against managers of Sav-On Drugstores, who sought to sue as a class for unpaid overtime, may not be the end for such actions.
RadioShack Corp. on July 15 agreed to pay $29.9 million to settle an overtime suit by 1,200 retail store managers in 550 stores.
The RadioShack managers sued in 2000, arguing that the electronics giant had improperly classified them as exempt from overtime wages even though they performed many of the same duties as lower-level staff, who were paid overtime.
In the Sav-On case, the 2nd District Court of Appeal in April vacated class certification granted by Los Angeles Superior Court Judge Irving Feffer, holding that the circumstances of each of 1,400 employees in 300 retail stores needed to be established individually. As a result, the appeals court held the suit could not be brought as a class action.
On July 17, six justices of the state high court voted to review that decision. Sav-On Drugstores v. Superior Court, 2002 DJDAR 4347 (Cal. July 17, 2002).
"We have established that the Court of Appeal decision in Sav-On is not a death knell for class actions based on management exemptions," said Robert W. Thompson of Callahan McCune & Willis in Tustin, attorney for the RadioShack plaintiffs.
Dennis Riordan of Riordan & Rosenthal in San Francisco, who represented Sav-On, could not be reached for comment.
The turning point in the RadioShack case came when an Orange County Superior Court judge denied a defense motion to decertify the class, Thompson said.
Judge Robert C. Jameson ruled that an individual analysis of each manager's duties was unnecessary. With trial set to start in August, Thompson said, RadioShack agreed to settle the suit.
Thompson said that - unlike in Sav-On - RadioShack has policies and procedures specifying how each manager should spend his or her time.
"That is the distinction that needs to be drawn," Thompson said. "I think that the fact that we were able to demonstrate to the trial court that the holding in Sav-On was inapplicable to RadioShack, therefore showed that the holding in Sav-On should be severely restricted.
"That gives me reason to believe that the California Supreme Court will modify if not reverse the Court of Appeal decision."
San Diego attorney Robert S. Brewer of McKenna Long & Aldridge, who represented RadioShack, could not be reached for comment.
Thompson said he took the case after a RadioShack manager came to him after learning of a similar case Thompson had settled on behalf of Mervyn's managers four years ago.
Under the terms of the RadioShack settlement, each manager who was employed with the California stores from March 27, 1996, to the present will receive $40,000.
Wage and hour claims have become very popular in recent years. The Sav-On settlement eclipsed a 2001 Pacific Bell agreement that awarded managers $28 million to settle similar claims.
For the Record In a story published in the Los Angeles Daily Journal on July 29, 2002, attorney Dennis Riordan?s role was incorrectly identified in Sav-On Drugstores v. Superior Court, 2002 DJDAR 4347 (Cal. July 17, 2002). Riordan of San Francisco?s Riordan & Rosenthal represented the plaintiffs in the case.
The Daily Journal regrets the error.
Jenna Bordelon
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