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Skechers Reaches Overtime Settlement

CALIFORNIA

The shoe designer will pay $1.8 million and take a charge if the deal is approved in court.

December 21, 2004|From Times Wire Services

Skechers USA Inc., the Manhattan Beach-based maker of sneakers and platform shoes, said Monday that it had reached a preliminary agreement to pay $1.8 million to settle two lawsuits that claimed the firm improperly classified California store managers as exempt from overtime.

The company's proposed settlement also covers a lawsuit that claimed Skechers wrongly deducted the cost of work uniforms from employee wages, the company said.

The footwear designer said the proposed settlement was subject to court approval.

California law makes it easier for store managers and assistant managers to qualify for overtime than federal law, which most companies use as a payroll benchmark. In recent years, RadioShack Corp. paid $29.9 million and Starbucks Corp. paid $18 million to settle similar overtime lawsuits.

Skechers said it would take a pretax charge of $1.8 million, or about 3 cents a share, in the fourth quarter of fiscal 2004 to cover the settlement.

Under the settlement, Skechers did not admit to violating California law and did not change its operating procedures, company spokesman David Weinberg said.

"We haven't changed anything substantive," Weinberg said. "We made changes early on and felt we never did anything wrong."

The settlement ends all pending wage and hour claims against the company dating back to 1998, he said.

Shares of Skechers rose 4 cents to $12.63 on the New York Stock Exchange before the news was released.

Bloomberg News and Reuters were used in compiling this report.

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