SAN FRANCISCO — Polo Ralph Lauren Corp. has agreed to pay $4 million to settle a class-action suit by 6,700 former employees in California alleging unpaid, off-the-clock labor just as the case was starting its third week in U.S. District Court here.

This story first appeared in the April 2, 2010 issue of WWD. Subscribe Today.

The settlement is still to be filed, but both sides on Monday revealed in court that an agreement had been reached in which the company didn’t admit any liability, according to attorneys with the case. The class-action lawsuit by workers at Polo full-line and outlet stores in California between May 2002 and January 2009 originally sought $17 million in back wages and penalties.

Central to the workers’ case were allegations of frequent time spent waiting at the end of their shifts for routine antitheft security checks, claims which Polo argued were exaggerated. Another pay issue being weighed involved a Polo “arrears” program, since discontinued, of withholding commission until the amount surpassed an employee’s base pay.

Patrick Kitchin, the employees’ attorney, said the settlement money would be divided among the 6,700 employees, according to the number of shifts they worked during the almost seven-year period the lawsuit covers.

Polo did not immediately respond to a request for comment.

The case got under way with opening arguments on March 16 in which William Goines, attorney for Polo, asserted not only that the plaintiffs’ claims were overstated, but that employees who felt they were due payment could have filed a time-clock correction form with Polo’s human resources department.

He also noted only 300 of 1,600 questionnaires distributed as part of a survey undertaken on behalf of the plaintiffs had been returned.

However, Kitchin argued workers were forced to wait, and missed their buses and ferries home. He said repeated complaints to security and managers were ignored. “A lot of times, the managers would say, ‘I’ll be with you in a minute,’” Kitchin told jurors. “People would have to page them and page them again.”

In unrelated Polo news, the company has signed a lease for a two-level store with nearly 8,000 square feet of selling space at 109 Prince Street in New York.

The new store will raise Polo Ralph Lauren’s downtown profile, which is already significant. The spokesman would not identify the concept or division that will occupy the unit, which is expected to open in the fall. Sources said the company considers the location to be a flagship.

The landmarked cast-iron manufacturing building at 109 Prince Street has 16-foot ceilings on the ground floor, a large open stairwell leading to the lower selling floor, an elevator and skylights. Part of the lower level, which goes underneath the sidewalk, was used by the previous tenant, Replay, for a cafe. Replay occupied the store until February when the building’s owner, Continental Group, bought out the remaining time on its lease.

The highly coveted space is near retailers such as Apple, J. Crew, Intermix and Michael Kors. Sources said Gucci and Louis Vuitton had looked at the space. Polo Ralph Lauren operates a Ralph Lauren store at 379 West Broadway in SoHo, Rugby at 99 University Place and Ralph Lauren children’s, men’s and women’s stores on Bleecker Street. There are also RRL units at 31 Prince Street in NoLIta and at 390 Bleecker Street.

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