Fastenal to pay $10 million to settle class action lawsuit

-- Industrial Distribution, 8/29/2008 10:06:00 AM

MRO distributor Fastenal said it will pay $10 million in cash as part of a preliminary settlement to a class action lawsuit alleging that the company failed to pay overtime to some former assistant managers.

The lawsuit was filed by former Fastenal assistant managers last year  accusing the distributor of misclassifying its assistant general managers as exempt from the federal Fair Labor Standards Act and corresponding state wage and hour laws in California, Oregon and Pennsylvania.

In a statement filed with the Securities and Exchange Commission, Fastenal denied the allegation, but said it was settling “in order to avoid significant legal fees, the uncertainty of a jury trial, distractions to Fastenal’s operations, and other expenses and management time that would have to be devoted to protracted litigation.”

Fastenal ranked 9th on INDUSTRIAL DISTRIBUTION’s 2008 Big 50 report, with $2.1 billion in sales. The $10 million payment will be included in the comapny's third-quarter results, ended Sept. 30.