Guitar Center has reached a preliminary agreement to settle two class action lawsuits brought by hourly employees who claim that the company improperly documented and enforced break-time and lunch periods in California. If the agreement is accepted by the court, the company would pay up to $3.5 million to resolve claims. The Westlake Village-based company said it plans to record a pre-tax charge of $2.5 million to $3 million in the fourth quarter in anticipation of the settlement. Leland P. Smith, executive vice president and general counsel for the company said that Guitar Center denies all wrong-doing and liability and is settling the lawsuits in order avoid distraction and legal expenses.
