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Abercrombie & Fitch Co. agreed to pay $25 million to settle claims by retail employees who say their wages were diminished by a requirement to wear company apparel.
The Fair Labor Standards Act considers uniforms used for work a business expense to be covered by the employer. Some states, such as New York, require employers to either provide laundry service or reimburse the expense. Disputes arise when clothing can pull double duty as a work uniform and as ordinary attire.
The settlement would cover about 258,000 employees at Abercrombie & Fitch, Abercrombie Kids, Hollister, and Gilly Hicks stores in New York, Florida, Massachusetts, and California. They said the cost of purchasing company products pushed their hourly pay below minimum wage.
The parties reached the settlement after factoring in the uncertainty and expense of protracted litigation, they said in asking for court approval. Judge Judge Michael H. Watson of the U.S. District Court for the Southern District of Ohio will review whether it’s a fair, reasonable, and adequate resolution.
The settlement, if approved, would cover a case against Abercrombie that was filed in a federal court in California and transferred to Ohio, as well as a second case that was filed in a federal court in Ohio.
Randall Aiman-Smith, Reed Marcy, Hallie Von Rock, and Carey James with Aiman-Smith & Marcy in Oakland, Calif., represented the workers.
Mark D. Kemple and John Richards with Greenberg Traurig LLP in Los Angeles represented Abercrombie.
The cases are Bojorquez v. Abercrombie & Fitch Co., S.D. Ohio, No. 2:16-cv-00551, motion for preliminary settlement approval 1/26/18; Brown v. Abercrombie & Fitch Co., S.D. Ohio, No. 2:17-cv-01093, motion for preliminary settlement approval 1/26/18.
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