Victoria's Secret reaches $12m settlement in California employee class action
L Brands-owned Victoria's Secret Stores LLC has agreed to pay $12 million to settle a class action brought by 40,000 former employees who alleged the company's call in wages policy cheated them out of hourly pay.
The lawsuit was originally brought in the U.S. District Court for the Central District of California in August of 2014. The trial court dismissed the call in claims in December of 2014.
The workers appealed to the Ninth Circuit where the attorneys made oral arguments before the higher court. At the end of last week, Victoria's Secret presented a motion to the appeals court offering to pay the 40,000 workers in the State of California $12 million to settle their claims before the court ruled on the appeal.
The lawsuit was brought out of the Victoria's Secret policy that employees had to call work two hours before their scheduled time to find out if they were needed in the store that day. The workers also claimed lost wages for when they would appear in store for scheduled shifts and then be sent home.
The settlement offer will cover all 40,000 California employees who were deemed nonexempt from overtime pay. Individual employees will receive compensation for lost wages based on how long they were employed under the call in system.
The lawsuit generated enough attention at the time for other state attorney generals to look into the call in practices of other retailers. Gap, J. Crew, Abercrombie & Fitch and Urban Outfitters, Vans, BCBG Max Azria, Forever21, Tilly's, Uniqlo and Coach were also investigated. Many retailers changed their call in policies to avoid further investigation and litigation.
In the workers' pleadings, they said "This case not only brought about significant positive change for the thousands of hourly employees of VS, it also played a role in doing so for literally hundreds of thousands of retail employees across the country."
In addition to the $12 million settlement, the attorneys for the employees have requested a fee of 30 percent of the settlement, or $3.6 million, plus expenses not to exceed $20,000. The full case is Mayra Casas v. Victoria's Secret Stores LLC, in the Central District of California.
Victoria's Secret contributed to a 2% sales drop at L Brands in April, and in February reported a plunge of 20% in comparative sales. The brand has been hit by a slowdown in consumer spending that analysts have attributed in part to changing millenial preferences, rejecting the Victoria's Secret underwired pushups for the lower-priced and more comfortable bralettes.
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