Pages: 1 2 3 4 5

« BACK

Visitors to RadioShackSucks.com are urged to support free speech.

Over the years, Tandy branched into other ventures, from tiles to department stores to imports, before repositioning itself in the retail electronics business. In 2000, the company changed its name from Tandy to RadioShack.

RadioShack's presence in downtown has never been more visible. After a highly publicized fight, the Fort Worth Housing Authority moved out the poor people living in its Ripley Arnold public housing complex and sold the land on which it sat to RadioShack. In place of Ripley's modest apartments, the company is building a new headquarters on the fringe of downtown, a "campus" of buildings that will dramatically alter the skyline from the north. The company's name is spelled out in giant letters up and down the twin towers of what was once called the Tandy Center. Most consumers are familiar with the company: RadioShack estimates that 94 percent of all Americans live within five minutes of a store or dealer.

RadioShack is but the latest in a series of businesses to be hit with class action lawsuits over alleged violations of the federal Fair Labor Standards Act, or similar state laws. Those laws generally require employers to pay time-and-a-half to workers who put in more than 40 hours a week. The same law also exempts some workers, such as managers and some professionals, from overtime pay. According to one account, Starbucks, for example, recently settled a similar lawsuit for $18 million.

In California, attorney Robert Thompson said RadioShack routinely refused to pay overtime to managers in their larger stores, known internally as "y-store managers,'' even though "the type of jobs they were doing was similar to their subordinates.''

According to Thompson, workers classified by RadioShack as managers were managers largely in name only. They didn't hire or fire. They often worked alone and hence often had no one to manage. Further, he said, the stores they supposedly managed were controlled so tightly by the corporate office in Fort Worth that managers had no leeway even on "where to stack batteries.'' Managers were further required to sell, just as those they supposedly supervised were, but were also required to work far in excess of the 40 hours a week for which they were paid, he said.

The class action lawsuit filed by Thompson's firm of Callahan, McCune & Willis, unlike claims filed by individuals, had to win judicial approval, or certification, before it could proceed. Shortly after the California suit was certified, RadioShack settled the case for $29.9 million -- two-thirds of which, Thompson said, will eventually be divided among past and present RadioShack managers in California.

"It's not that this is an isolated incident,'' he said. "It's clear that there are a lot of y-store managers in all of the 50 states that feel they're not being paid in accordance with the law.''

But Hill, the RadioShack vice president, said store managers are more than glorified sale associates. "A store manager has a broad range of responsibilities -- inventory management, store profitability, employee scheduling, store appearance, hiring, training, [and] store displays,'' he said. "There are a lot of managers who do work more than 40 hours a week, and there are some that don't.''

He said the company chose to settle the California lawsuit not because it had done anything wrong but because it was a "highly distracting piece of litigation and we felt it could drag on for two to three years. ... We thought it made sense to settle.''

The ink had not dried on that settlement when the Chicago law firm of Touhy & Touhy filed a similar lawsuit on behalf of RadioShack workers. That suit, unlike the one in California which focused on workers in just one state, seeks to recover damages for perhaps as many as 10,000 underpaid RadioShack workers across the nation -- and involves perhaps as much as $100 million in unpaid overtime.

That lawsuit was originally filed on behalf of David B. Tibbetts and three other RadioShack managers. Shortly after the class action lawsuit was filed, however, Tibbetts was fired for "unsatisfactory performance." Tibbetts -- who won company awards as a manager and "sales dominator" -- has since filed a separate lawsuit claiming he was fired in retaliation for suing his employee of 13 years. The lawsuit that was originally filed on Tibbetts' behalf is the same suit that Kujak and about a thousand other workers have joined.

U.S. District Judge Rebecca Pallmeyer's 18-page ruling on the case gave the Touhy firm the go-ahead to proceed but also warned that the road before them was anything but certain.

Pallmeyer said RadioShack managers "were in charge of their stores, had only sporadic direct contact with supervisors, and earned substantially more than their subordinate sales associates'' -- factors that weigh in favor of the company. But she also noted that the managers devoted a large percentage of time to sales and that their "sales prowess was emphasized in RadioShack's assessment of their performance." Expressing some uncertainty about the outcome of the lawsuit, Pallmeyer concluded that the case could nevertheless proceed.

NEXT »

Pages: 1 2 3 4 5