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Staples announced that it has reached a settlement in a wage and hour class action lawsuit concerning the alleged misclassification of its California-based assistant store managers. The settlement of $38 million, which is subject to court approval, resolves the allegations and allows Staples to avoid further expense and distraction from litigation that has been ongoing for the past eight years. The company first reported this litigation in its Form 10-Q filing on May 20, 2003 and subsequently reported claims for up to $150 million. The settlement amount includes interest and class counsel's attorney fees. Settlement documentation is expected to be filed with the Court on November 7, 2007.
Staples believes that its store labor model, which is based on a commitment to fair and respectful treatment of its associates, is fully compliant with applicable California law. Staples admits no wrongdoing in connection with the allegations, which claim that assistant store managers in California were misclassified as exempt from overtime pay. The settlement amount resolves claims for damages spanning a twelve-year period made by attorneys representing a class of more than 1,700 current and former associates.
