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Ex-HHGregg manager's lawsuit grows into class-action

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A lawsuit brought by a former HHGregg Inc. manager charging that the company failed to pay incentive bonuses has been granted class-action status by a Marion Superior Court judge.

Former accounting manager Dwain Underwood filed his complaint in March 2013, claiming that the Indianapolis-based appliance, electronics and furniture retailer failed to factor a $40 million payout into the calculation used to determine whether employees were entitled to incentive bonuses.

The company collected the payout after Executive Chairman Jerry Throgmartin died in 2012.

Underwood claims HHGregg should have paid him a $25,000 bonus based on the company’s fiscal 2012 earnings before interest, taxes, depreciation and amortization, or EBITDA, of $144.4 million.

Underwood claims HHGregg wrongly based bonuses on “adjusted EBITDA,” which excluded the life insurance payout. The payout sent HHGregg's profit soaring in the fiscal fourth quarter of 2012.

The complaint involves 62 current and former HHGregg employees, according to Judge Robert R. Altice Jr.’s July 9 ruling awarding Underwood’s suit class-action status.

Underwood’s attorney, Eric Pavlack, said the amount of unpaid bonuses totals about $5 million.

“We’re very pleased with the decision,” he said. “We weren’t surprised because we think it’s the right decision. We were hopeful that this is what would happen.”

A spokeswoman for HHGregg said the company doesn’t comment on pending litigation.

In rendering his decision, the judge disagreed with HHGregg’s argument that class-action status should not be granted because some members don’t want to belong to the suit.

“If such class members do not wish to participate in this case,” Altice wrote, “they will have the opportunity to opt out after receiving notice.”

Underwood voluntarily left the company in January 2013, two months before he filed suit.

He is suing the company for breach of contract and unjust enrichment.

 
 

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  1. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  2. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  3. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  4. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

  5. I will agree with that as soon as law schools stop lying to prospective students about salaries and employment opportunities in the legal profession. There is no defense to the fraudulent numbers first year salaries they post to mislead people into going to law school.

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