REI Overtime Class Action Lawsuit Settles for $2.5 Million

Large corporations have developed a reputation for cutting costs by cheating their employees out of wages. Everything from forcing employees to work off the clock to misclassifying them as exempt from overtime has become common practice in corporate America.

Despite the fact these practices are against the law, companies often get away with treating their employees this way because many employees simply don’t know their rights under the law. Others don’t want to get in trouble with their employer. This is why wage and hour lawsuits are often filed by former employees, despite the fact the law prohibits retaliation from employers.

The federal Fair Labor Standards Act (FLSA) requires employers conducting business in the United States to pay all their hourly workers no less than $7.25 per hour. It also mandates that employees be paid one and one-half times their normal hourly rate for all overtime. Overtime is defined as any time spent working after eight hours a day or forty hours a week.

In addition to the FLSA, each state has their own laws regulating things like minimum wage, overtime, and break time. In California, the minimum wage is set at $9.00 per hour, and employers are required to provide hourly workers with breaks throughout the day.

Under California labor law, all hourly employees are entitled to a paid rest break of at least ten minutes for every four hours they spend working. For every five hours worked, employees are entitled to an unpaid meal break lasting at least half an hour. For every day an employee does not take one of these breaks, for any reason, the law requires her to be paid one hour’s worth of wages, in addition to all wages earned that day.

According to a recent wage and hour class action lawsuit against Recreational Equipment Inc. (REI), the sporting goods store and coop allegedly: failed to pay its employees minimum wage and overtime, failed to compensate employees for business expenses, made them work off the clock, and made them miss meal and rest breaks without the proper compensation.

The lawsuit was filed by two former employees of REI who brought the lawsuit on behalf of all similarly situated employees for the retail company. The approved class consists of all hourly non-exempt employees of REI who worked for the company between November 21, 2009 and October, 31, 2014. All told, this makes a class that consists of about 5,000 current and former employees.

The lawsuit was recently settled for $2.5 million. About $770,000 of the settlement money will be set aside for attorneys’ fees and legal costs, while the rest will be distributed among the class members. The two named plaintiffs will each receive $5,000 as an incentive award for filing the lawsuit.

The settlement has already been granted preliminary approval by a court judge who found it to be proper and fair to all of the class members. The settlement still needs to go through a final hearing before REI can start sending out checks to class members and put the matter behind them for good.  REI has denied all wrongdoing claims.

Our Naperville and Joliet wage and hour attorneys and unpaid overtime lawyers and attorneys are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers misclassify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

Nationwide Consumer Rights is based in Chicago and Oakbrook Terrace. We represent clients throughout the country who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago class action attorneys by phone at 630-333-0333 or through our online form.

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