Aclass action setback for Lowe’s

Alawsuit filed by two former Lowe’s workers claiming they were forced to work unpaid overtime was granted class action status by a California appellate court on July 30. The three-judge panel overturned a lower court’s decision, clearing the way for a massive tort action that could involve as many as 30,000 current and former Lowe’s employees in California.

The original lawsuit, filed in Los Angeles Superior Court in 2001, claimed that hourly employees were often required to clock out and then continue working until all their tasks were completed. Workers who refused were reprimanded and subject to termination, the lawsuit said.

In seeking class action status, the plaintiffs’ lawyers argued that Lowe’s restrictive overtime policy, combined with management incentives to keep payroll costs down, led to similar practices at many of Lowe’s California stores. During depositions, other Lowe’s employees testified that they had also worked “off the clock” on a regular basis.

Lowe’s argued that unpaid overtime allegations needed to be investigated individually, on a separate basis. The North Carolina retailer also submitted 67 declarations, 40 of them from store managers, asserting that hourly employees did not work off the clock and that overtime policies varied from store to store.

The trial court denied a motion that would have compelled Lowe’s to provide plaintiffs’ counsel with the names and addresses of all its hourly California employees dating back to Oct. 29, 1997. It was the size of this group—estimated to be in excess of 25,000—that ultimately swayed the lower court to decide in Lowe’s favor in 2003. Expressing concerns that the class was too big, the Superior Court ruled that the complaints should be adjudicated on behalf of individual plaintiffs.

The California Court of Appeals, 2nd District, found fault with that reasoning. The potential size of the class should not be a determining factor, the appellate court ruled. It overturned the lower court’s decision and certified the case as a class action.

A spokesperson for Lowe’s said the company does not comment on pending litigation. Phillip Eskenazi, the attorney who represented Lowe’s before the appellate court, did not respond to requests for comment.

Arnold Schwartz of Schwartz, Daniels and Bradley, one of the plaintiff lawyers, told HCN that letters, published notices and other forms of communication will be sent to current and former Lowe’s employees notifying them of the class action status. As a result of an earlier ruling by the appellate court, Schwartz already has a list of nearly 30,000 potential class members.

Lowe’s has been the subject of class action lawsuits involving overtime compensation in several other states, as well as a federal class action suit. The latter case, filed in U.S. District Court in Kansas, was settled on Sept. 22, 2006. The terms of that settlement remain confidential, at Lowe’s request, while the potential class members are being notified. In court documents, Lowe’s said the number of current and former employees in that group could reach 75,000.