Callahan, McCune & Willis, APLC Announces Nearly $9 Million Settlement in Case Against RadioShack

Three Federal District Courts have approved a coordinated class action settlement for approximately 8.8 million dollars in a series of lawsuits brought by RadioShack store managers against the company. The courts’ approval follows a conditional settlement reached by the plaintiff classes and RadioShack Corporation in June of 2006.

The plaintiff classes, which included over 4000 current and former RadioShack store managers, sought recovery of unpaid overtime wages under the Fair Labor Standards Act claiming that RadioShack had misclassified them as employees exempt from the receipt of overtime wages. The Pennsylvania class also sought relief under two state overtime wage statutes.

A landmark court ruling by District Court Judge Rebecca Pallmeyer on the issue of subordinate supervision in the case both paved the way for the settlement and established new guidance in this area of the law, which is now being cited in cases throughout the country as the “80/80” rule.

In September of 2005, Judge Pallmeyer ruled that store managers who failed to supervise at least 80 hours of subordinate time at least 80% of their workweeks did not meet the legal standard for exemption and were therefore entitled to overtime. Because Judge Pallmeyer’s ruling only applied to a portion of the class, the parties had to continue to litigate the matter to resolve other legal issues and damages.

The cases, initially filed in 2002, were litigated by five separate firms for the Plaintiffs in four states, led by Robert Thompson, Lee Sherman and Charles Russell of Callahan, McCune & Willis, APLC; Daniel K. Touhy of Touhy & Touhy, Ltd.; and Joseph Roda and Michele Burkholder of RodaNast, P.C. Thompson and Touhy jointly argued the 80/80 issue in Chicago, and were extremely pleased to have helped bring about this new legal standard which may provide guidance in other cases affecting small retail operations throughout the nation.

For further information please contact: Daniel K. Touhy at 312-372-2209, Robert W. Thompson at 714-730-5700, or Joseph Roda at 717-892-3000. Copies of the Court’s Decision are available upon request.

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