A national collective action has been filed in Texas against retail giant, JC Penny Corporation. The action is brought on behalf of all current and former employees involved in watch and jewelry repair who held the titles of jewelers, project assistant analysts, management associates and administrative associates from all JC Penny stores who since May 2001 and were not paid proper statutory overtime for all hours worked beyond 40 per week. The action is brought under the federal Fair Labor Standards Act and seeks back pay, statutory and liquidated damages as well as declaratory and injunctive relief. As a collective action under federal law, all potential claimants are required to "opt-in" to the action in order to be considered part of the class. The employees have requested that the court issue notice to all potential class members.

According to employees, JC Penny has engaged in a willful and intentional course of action to defraud them of proper overtime compensation. The employees claim that JC Penny frequently requires them to work well in excess of 40 hours per week. However, according to employees, the company has no provisions in place to properly compensate employees for overtime for these hours. Under the Fair Labor Standards Act, all "non-exempt" employees are entitled to a minimum of time and a half for all hours worked in excess of 40 per week. "Non-exempt" employees are generally those that work on an hourly basis and do not have managerial or executive responsibility. The employees claim that despite the exempt status which J.C. Penny claims applies to them, they are "non-exempt" employees and therefore entitled to receive overtime compensation for all hours worked beyond 40 per week. The employees also claim that because JC Penny's refusal to pay overtime was willful and intentional, they are entitled to an equal amount of liquidated damages.