Dick's Sporting Goods Inc. has agreed to pay up to $15 million, plus interest and taxes, to settle a multistate wage and hour lawsuit first filed by a Rochester-area sales clerk.
An agreement inked between the sporting goods chain and plaintiffs' attorneys would settle class-action claims under 36 states' laws, Dick's states in papers filed with the Securities and Exchange Commission late last week. It is subject to court approval.
The suit was filed by Dolin, Thomas & Solomon LLP in 2005. The local worker, Tamara Barrus of Brockport, was identified as lead plaintiff. At the time, she was the only plaintiff.
Also named as a defendant was Galyans Trading Co. Inc., an Indianapolis-based sporting goods chain that Dick's had recently acquired. Galyans stores, including one in Henrietta, were merged into the Dick's chain.
After dozens of other current and former Dick's workers joined the action, the court certified the case as a class action in 2006. The SEC filing states that the settlement agreement would close out related cases in 22 states.
Founded in the 1950s as a bait and tackle shop in Binghamton, Dick's has 400 stores in 40 states, including locations in Greece, Victor, Webster and Henrietta. The company (NYSE: DKS) posted revenues of $4.4 billion and earnings of $135.4 million last year.
Barrus' complaint accused Dick's of using payroll software to short workers' pay automatically. Such software was used widely by employers, but its legitimacy had not been tested by a court case, plaintiff attorney Patrick Solomon said at the time the lawsuit was filed.
The payroll software automatically deducted break periods and lunch hours from employees' records even though Barrus and other Dick's workers routinely worked through scheduled breaks and lunch periods or were called back to work before their break time was up, Barrus alleged in court papers. If the automatically docked time were counted, workers would have been eligible to collect overtime pay, the complaint claimed.
An amended complaint filed Monday alleges the company deliberately encouraged managers to force employees into off-the-clock work and adds several Dick's executives, including President and CEO Edward Stack, as defendants.
The chain's top executives "put pressure on management of all levels, including at the district and store level, to encourage and allow hourly employees to perform off-the-clock work. This is achieved by the promises of reward and punishment. Defendants set payroll budgets that can only realistically be met if hourly employees are performing work off the clock," the complaint filed Monday alleges.
Barrus' suit was one of two such class-action lawsuits that Dolin, Thomas filed against Dick's in 2005. In the other case, in-store golf instructors claimed to have been shorted on pay. Court records show Dick's agreed to pay $1.25 million in February 2010 to settle the golf instructors' complaint.
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