Sears Agrees to $5M Settlement in Wages Class Action

Sears has agreed to a $5 million settlement in a class action alleging it misclassified workers in order to not pay them overtime pay.

“The $5 million settlement resolves all current and potential litigation concerning the classification of the [loss prevention managers] position,” the settlement document filed July 16 states. “This settlement was reached after the parties participated in two mediations with Mark Rudy, a well-known and experienced wage and hour mediator, followed by five months of exhaustive post-mediation negotiations conducted by the parties.”

Following deductions, the settlement will pay the employees an average of approximately $21 per each week they worked during the time period covered by the unpaid overtime settlement, which is an average of $1,800 per worker.

Sears Holdings Management Corp. agreed to the settlement to end the lawsuit accusing the company of misclassifying hundreds of employees.

Various Sears and Kmart retail stores were affected by this unpaid overtime lawsuit, which allege violations of the Fair Labor Standards Act.

For more on the suit, click here.