MERVYN SUED ON OVERTIME
Byline: Teena Hammond
LOS ANGELES — Employees of Mervyn’s are suing the retailer and its parent, Dayton Hudson Corp., for $111 million in back pay and seeking preliminary injunctions to end Mervyn’s alleged practice of forcing low-level managers to work up to 80-hour weeks without overtime pay.
Two suits by different employees were filed in Orange County Superior Court in California, beginning in late March. They seek back wages for four years, as well as damages, for 1,750 employees.
The lawsuits claim employees worked 60 to 80 hours a week without overtime pay, said Robert W. Thompson, a lawyer for the plaintiffs in both suits.
Thompson said he will file a motion by May 8 to have the suits classified as a class, and the court is expected to respond by early June. Mervyn’s operates 276 stores in 15 states, but its 127 California locations are the only ones targeted in the suit.
The first suit, filed March 27, affects about 450 employees who were designated by Mervyn’s as either “team leaders” or “operations team leaders.” These salaried employees earn about $40,000 annually. Mervyn’s considers these employees exempt from overtime pay, according to the lawsuit.
The suit said these employees should have received overtime wages because they spent most of their time handling non supervisory tasks such as filling out credit-card forms, stocking shelves and ringing up merchandise. These employees do not fit the state’s definition of an exempt employee because less than 50 percent of their work hours are spent on managerial or administrative duties, according to the suit.
The plaintiff named in the March 27 suit is Jill Hess, an operations team leader employed at Mervyn’s in Irvine, Calif.
The second suit, filed April 8, affects about 1,300 clerical supervisors designated as “team coordinators.” They earn about $10 to $11.50 an hour and were eligible for overtime under Mervyn’s rules.
On Friday, the California Industrial Welfare Commission repealed the daily requirement of the overtime law. The repeal, expected to take effect July 1, means that employers are only required to pay overtime for when employees work more than 40 hours a week. Previously, employers would also be required to pay overtime for hours after an eight-hour day.
The plaintiff named in the April 8 suit is Donald Priestly, who worked at Mervyn’s in Mission Viejo, Calif., but is no longer employed there.
The suits contend that Mervyn’s used its reduced labor costs to gain an unfair advantage over competitors by pricing its merchandise below cost.
According to Thompson, “For a lot of retail companies, especially in California, it’s so competitive that the only way to increase profits is to decrease expenses. The only way to do that in a labor-heavy industry like retail is to keep your wages down, which you do by keeping your employees off the clock.”
A Mervyn’s spokeswoman said the firm’s legal department has a copy of the suits but will not comment on the pending litigation. Officials at Minneapolis, Minn.-based Dayton Hudson declined to comment.
Thompson compares the case with Nordstrom Inc.’s 1993 settlement after a suit was filed in Seattle alleging that the company had failed to pay its employees for hours worked writing thank-you notes and restocking inventory. The retailer agreed to pay up to $4,000 each to thousands of employees.