Footwear maker Skechers USA has reached a preliminary agreement to settle three disputed class action lawsuits brought by former and present store managers, assistant store managers and retail employees.

The first two suits, which were filed on 2 December 2002 and 25 February 2004, accused the company of improperly classifying store managers and assistant store managers as exempt under California's wage and hour laws.
The third suit, which was filed on 7 July 2004, accused the company of improperly taking expenses for work uniforms from employee wages.

The plaintiffs were also looking to amend the complaints to allege meal and rest time violations of the California law. The suits all sought damages and civil penalties, as well as injunctive relief against the company. The company denied all liability.

The preliminary settlement - which deals with all claims dating back to 1998 and is still subject to court approval - fully resolves all claims brought by the plaintiffs in these California lawsuits.

According to the preliminary agreement, the company will pay a potential maximum settlement amount of $1.8 million to cover claims made by eligible class members, plaintiff attorneys' fees and costs, and costs of a third-party administrator.

While the matter is still subject to court approval, the company estimates that the settlement will mean to a pre-tax charge of $1.8m in the fourth quarter of fiscal 2004.

Philip Paccione, Skechers' executive vice president and general counsel, said that the company was pleased to put the cases behind it.

He added: "While the company denies all liability in every one of these cases, it has agreed to the settlement to resolve all of the claims and avoid engaging in future expensive, distracting and protracted litigation."