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BJ's Wholesale Club, Inc. and Failure to Pay Overtime

By Tanya Roth, Esq. on November 25, 2009 | Last updated on March 21, 2019

What does your boss call you? It might matter more than you think. Mid-level managers for BJ's Wholesale Club, Inc. settled a class action lawsuit against the company due to mis-classification of their positions so as not to pay overtime.

Last week, BJ's announced the settlement with approximately 1,500 current and former managers employed since 2007. Exact numbers of employees receiving money under the settlement and the exact amount they may receive will not be disclosed until the court gives final approval to the settlement and all claims have been submitted, according to reports. 

What may have been an attempt by the company to save money by misclassifying workers as ineligible for overtime pay, has actually cost them a great deal. First, of course is the amount of the settlement itself. Reports show the company recorded a $11.7 million pre tax charge in connection with the suit. In addition, the effect of the settlement has influenced the BJ's Wholesale Club, Inc. share price, causing it to drop from $.48 a share last year, to $.32 a share this quarter. Not precisely the savings the company may have been hoping.

Finally, there is the PR fall-out. Hoping to protect the company's image, Sue Hoffman, Senior Vice President and Chief Personnel Officer released a statement to the press: "BJ's Wholesale Club values the role each team member plays in serving our Members and helping our Company succeed and grow. As such, it was important that we move quickly to address and resolve this matter."

The Massachusetts based company operates 186 clubs and 104 gas stations in the eastern United States. The company admits no wrongdoing in the settlement of the lawsuit.

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