ICT Group Inc., a Newtown, PA-based telemarketing firm, said it has accrued $12.8 million to pay the claims in a class action lawsuit filed against it by West Virginia call center employees who said they were not paid the wages to which they were entitled. This follows a court ruling against the firm. The Circuit Court of Berkeley County, West Virginia ruled on April 16 that if the firm is held liable in the case, it must compensate employees who were not paid for transition time, short breaks or other wages. These class members would receive a day’s pay for every day the amounts remained unpaid up to 30 days.
ICT said it would continue to fight the suit, and that it would appeal that order.
Initially, the firm had set aside $1.3 million to resolve the suit. The additional $11.5 million would cover the firm’s estimate of additional liquidated damages and interest.
But the additional charges, which hit during the first quarter, could put ICT at risk of not meeting financial convenants required under its credit facility, the company said. ICT plans to seek a wavier of the covenants.
In March, the court denied a motion by the plaintiffs that would have required ICT to post a bond.
The case was filed in 1998 on behalf of over 11,000 employees who said they were not paid for short breaks or for transition times during which they were shifted from one assignment to another.
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