Leading casual apparel chain Pacific Sunwear of California Inc on Tuesday announced it had settled two multi-million dollar lawsuits related to overtime pay.

The Anaheim-based operator of more than 800 stores said the purported class actions allege that the company improperly classified certain California-based employees as "exempt" from overtime pay.

It will pay around $4 million to settle the suits and said although it continues to deny the allegations it "agreed to the settlement to avoid the cost, distraction and uncertainty associated with protracted litigation during the important summer and back-to-school selling seasons".

PacSun added the settlement is subject to court approval and will not have any material impact on results for the first quarter ending May 3, 2003.

The suit is one of many similar suits filed against retailers with operations in California under tough state labour laws.