Dick’s Side of the Story

I grew up frequenting my local Sportmart, which was eventually acquired by Sports Authority. I never had any issues with quality, service, or product availability, but after a Dick’s Sporting Goods was built just a few minutes closer to my house, my preference changed almost immediately. Dick’s had a more impressive looking, cleaner store with a wider variety of gear to offer. They even had a climbing wall- which I’ll admit I never used but pulled me to the store nonetheless. Until last week, my view of Dick’s Sporting Goods was completely untainted. That’s why I was surprised to hear that they have been involved in a number of class action lawsuits surrounding complaints about unfair treatment of employees.

While the details vary from case to case, the main idea was that Dick’s was habitually forcing assistant managers to work overtime without pay. By classifying these employees as assistant managers, Dick’s was able to say they were exempt from overtime pay. However, the alleged duties performed by them were inconsistent with what the Fair Labor Standards Act defines as managerial, meaning they should not be exempt from overtime pay. Dick’s is currently looking to settle the case outside of court for around $10 million, and paid $15.5 million in 2011 in 23 similar cases.

It was incredibly easy to find current and former Dick’s managers backing their claims with a quick internet search. Much more difficult to find was anything from Dick’s perspective. I continuously saw the same line appear in each article, stating that Dick’s was “denying that it did anything that violated state wage laws.” I was eventually able to find a short description of the defenses Dick’s was using, including statutory exemptions and the statute of limitations, and “more than a dozen additional defenses.” Although I realize my bias in hoping that Dick’s would be above treating their employees like this, I was very surprised by the general tone of guilt in nearly everything I read.

Settling before going to trial is becoming increasingly popular, but I would argue that this may be for the wrong reasons. When I hear that Dick’s, or any company for that matter, is settling for millions of dollars, my initial conclusion is that they are probably guilty but hoping they won’t have to admit that guilt. While that very well may be the case, there are also other possibilities. The costs involved in fighting a litigation over the course of years is astronomical, and Dick’s could be looking to avoid that. Additionally, the longer a case is drawn out, the more people will inevitably hear about it, and allegations, even without being proven, don’t help any company’s reputation.

If I were to put myself in the shoes of executives at Dick’s, I can’t say I would handle the situation very differently. Assuming what they say about never having violated any labor laws is true, the settlements could have been a strategic play to cut costs and put an image harming situation behind them. There are strict laws regarding what can be said in public regarding ongoing cases, but if Dick’s truly believes it was innocent of any wrongdoing, I think it should have been more vocal. Even ignoring their factuality, the sheer volume of people and articles speaking out against the company paint a picture of guilt.


One thought on “Dick’s Side of the Story

  1. Will, you raise an interesting problem facing Dick’s and other companies alike. It seems as though several companies continue to pay unfair wages based on the amount of time they work. We have seen this in the cases of Apple and Nike, but as we have learned, no company is without flaws. I agree that the executives should have voiced the issue sooner to its customers, even though they might believe they are not doing anything wrong. Additionally, I find your rationale behind settling in court very interesting–I think it is important to note that they could be settling out of pure guilt.


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