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Earl Scheib Settles California Wage-And-Hour Class Action Lawsuit

Earl Scheib has reached an agreement to settle a putative class action lawsuit related to how the company’s California subsidiary classified certain employees under California overtime law over an approximately seven year period. The lawsuit, which was filed in March 2000, is similar to numerous lawsuits filed against retailers and other employers with operations in California. While the company denies the allegations underlying the lawsuit, it said it has agreed to the settlement to avoid additional legal fees, other expenses and management time that would have to be devoted to protracted and uncertain litigation.

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SHERMAN OAKS, CA — Earl Scheib has reached an agreement to settle a putative class action lawsuit related to how the company’s California subsidiary classified certain employees under California overtime law over an approximately seven year period.

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The lawsuit, which was filed in March 2000, is similar to numerous lawsuits filed against retailers and other employers with operations in California. While the company denies the allegations underlying the lawsuit, it said it has agreed to the settlement to avoid additional legal fees, other expenses and management time that would have to be devoted to protracted and uncertain litigation.

Under the agreement, which is subject to approval by the California Superior Court for the County of Los Angeles, approximately 450 current and former employees will be entitled to make verified claims to share in the settlement. The maximum amount of the settlement, including claim payments and related taxes and expenses, administrative fees and class counsel fees and expenses is $750,000. The company’s maximum portion of the settlement is $250,000 all of which has been previously accrued on the company’s balance sheets.

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Commenting on the suit, Christian Bement, president and chief executive officer of Earl Scheib, said, “While the company denies all liability or wrongdoing in this case and had, in fact, prevailed on a similar case, we chose to settle this lawsuit in order to avoid the distraction and expense, together with the risks, of protracted litigation that we would otherwise incur. We are satisfied that the settlement of this lawsuit is in the best interests of Earl Scheib, its stockholders and other stakeholders including our employees.”

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