Rent-A-Center’s $2.7 Million Overtime Settlement Approved

A Judge in California recently approved a $2.7 million settlement between Rent-A-Center–the largest rent-to-own company in the U.S.–and 2,600 of its store managers. The settlement, which received preliminary approval three months ago, ends a lawsuit which began in late 2010 by Rent-A-Center employees alleging multiple violations of California labor law.

One of the major legal violations alleged by the store managers was Rent-A-Center’s disregard for California’s overtime law. Like federal overtime law, California’s overtime law requires that employees be paid one-and-one-half times their regular rate of pay for all hours worked in excess of forty during every workweek. In addition, California’s overtime law requires that employees be paid one-and-one-half times their regular rate of pay for all hours worked in excess of eight per day, and double their regular rate of pay for all hours worked in excess of twelve per day (or eight if it occurs on the seventh consecutive day of work in a workweek). Rent-A-Center apparently failed to pay its store managers properly for overtime hours they worked, claiming that California’s overtime laws did not apply to them. While California and federal overtime laws do not apply to certain types of workers, employers often misclassify their employees as not covered by these laws when, in fact, they are covered.

Another of the store managers’ allegations was that Rent-A-Center denied them rest and meal periods, as required by California law. To put it as simply as possible, California law basically requires employers to provide a paid, thirty-minute meal period for every five hours of work performed, and a paid, ten-minute rest period for every two hours of work performed.

Jeff James, the lead plaintiff in this case and a ten-year Rent-A-Center employee, originally decided to file the suit after quitting his job over the company’s overtime policies. Mr. James’ lawsuit expanded into a class action suit seeking compensation for all current and former California store managers. As explained previously on this blog, class and collective action lawsuits can put more pressure on offending companies to settle lawsuits with their employees, as happened in this case, rather than risk the possibility of a large judgment against them. For his efforts as lead-plaintiff, Mr. James was awarded an additional $15,000 award. Mr. James, describing how Rent-A-Center has changed it compensation polices in light of his suit, said, “This is a great benefit to the employees as they now get paid properly according to California law … This was always a goal of mine in this litigation.” Evidently previous wage and hour lawsuits against Rent-A-Center had not done enough to convince the company to change its compensation policies–suits similar to Mr. James’ were filed against the company in 2001, 2002, and in February of this year.

If you think that your employer has not paid you what you are owed under the law, or if you would like to learn more about your rights at work, you should contact a St. Louis overtime lawyer.