Since Dec. 23, 2005, plaintiff Michael Gilhuly, an employee at KMART Corp., was allegedly misclassified as a manager, causing him to not earn overtime wages or receive proper break periods. Gilhuly, acting individually and on behalf of those similarly situated, brought a class action against KMART Corp. for violations of the Labor Code and Unfair Competition Act. The case was originally in Alameda Superior Court, but later was removed to federal court. The class of over 100 members claimed that they were misclassified as exempt sales coaches, operations managers and/or merchandise managers by KMART since Dec. 23, 2005. As a result, the class claimed that KMART failed to provide them with overtime and regular wages, and proper meal and rest periods. They also claimed that KMART failed to pay wages upon termination and that the company’s actions constituted unfair business practices under the Unfair Competition Act. KMART contended that it properly designated Gilhuly and the class as exempt and fully complied with the law at all times., The class sought recovery for damages for unpaid overtime wages and interest. They also sought recovery for one hour of pay at each employee’s regular rate for each work day that a meal period was not provided, and one hour of pay at each employee’s regular rate for each work day that a rest period was not provided. In addition, they sought various penalties, and recovery of attorney fees and costs.