RadioShack Loses Round in Overtime Lawsuit

A federal judge has ordered RadioShack Corp. to pay overtime to several hundred current and former store managers as part of a class-action lawsuit against the electronics retailer.


A lawyer for the workers estimated that the ruling would cost RadioShack $5 million to $15 million. A larger case involving more than 3,000 employees is scheduled for trial in February. The workers argued that they were essentially sales people with limited management duties and that RadioShack improperly classified them as managers to avoid paying overtime.

U.S. District Judge Rebecca R. Pallmeyer of Chicago agreed, at least for some of the managers. In a ruling last week, Pallmeyer said managers who worked more than 40 hours a week but did not regularly supervise two or more subordinates should have been paid overtime.

Daniel K. Touhy, one of the plaintiffs' lawyers, said the judge's ruling would benefit 600 to 1,000 store managers and cost the chain up to $15 million. If lawyers are unable to agree within 45 days which employees should be paid and how much they should get, the judge will appoint someone to do the job.

A jury trial is scheduled for February to decide the claims of store managers who presumably did supervise at least two subordinates and determine whether RadioShack willfully violated labor laws, which could double the damages.

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