Borders Proposes Overtime Settlement; Makes Cuts

A class-action lawsuit by two former assistant managers of Borders stores in California, charging that the retailer should have paid them overtime, has been tentatively settled. The company has agreed to pay $2.2 million to approximately 600 former assistant managers who worked in California Borders stores from April 10, 1996, to March 18, 2001. Under the proposed settlement, Borders agreed to pay the disputed overtime pay plus penalties and interest, attorneys' fees, costs and administrative fees. The settlement, which avoids a trial that had been set for next month, is subject to court approval.

In the complaint, first filed in 1996, the former assistant managers asserted that since they spent more than 50% of their time working at tasks they considered not managerial, they were entitled to overtime. Borders contended that because their job title was assistant manager, they were exempt from overtime, no matter what duties they performed. The assistant manager position was eliminated in 2001, during a reorganization of job titles throughout the company's stores.

In other company news, Borders has let go 20 workers in the IT department at its Ann Arbor, Mich., headquarters, and cut 11 field management positions at Waldenbooks. Borders spokesperson Ann Roman told PW the IT layoffs resulted from a "shift from a build-within strategy to acquiring pre-built software." Roman added that Borders is "enhancing overall investment in IT" and continues to hire for new positions, though not in software development.

The job cuts at Waldenbooks were due to the recent closing of various Waldenbooks stores (many of them in the South), which necessitated "geographic shifting" of human resources, Roman said.