Michaels Settles Back Pay Lawsuit

February 1, 2002 (PLANSPONSOR.com) - Aaron Brothers Inc., a unit of arts and crafts retailer Michaels Stores, has settled a lawsuit claiming it didn't properly pay overtime to store managers.

Although the terms of the settlement were not reported, Michaels, of Irving, Texas, will take a $5 million pre-tax charge to cover its expenses, Reuters reported.

The dispute started in April 1999 when Suzanne Collins, a former Aaron Brothers assistant manager, filed suit in Los Angeles superior court to recover back overtime pay.

Collins’ suit said Aaron Brothers was mistaken when it treated store managers, assistant store managers, and managers-in-training as exempt for overtime purposes.