Radio Shack Settlement Distribution On the Horizon

Just in time for the holidays, store managers of Radio Shack and part of several class and collective actions may soon be receiving distributions from the $8.8 million settlement. In the past, the plaintiffs' law firm, Callahan, McClune & Willis, has claimed that there are 4,000 plaintiffs in the class. The real winner in this settlement is the plaintiffs' law firm who will receive over $3.4 million in fees and $1.3 million for out-of-pocket expenses. The remainder, a little over $4 million, will be distributed to class members and class representatives.

This litigation offers guidance to other employers on retail employee's primary duties. A September 2005 decision in the litigation held that store managers who did not supervise at least 80 hours of subordinate time for at least 80% of a workweek did not satisfy the "exempt" standard. The managers had estimated 80% of their time was spent on non managerial tasks. The court stated that the percentage of time spent on activities was important, but it was not controlling. Unlike other cases involving retail store managers and in large part based on language in their managers manual, Radio Shack arguably had selling its products, versus management, as the primary duty of its store managers. This allowed the court to determine the store managers were not "exempt" and were entitled to overtime.

To read more on this settlement from Employment Law 360, click here.