On January 17, 1992, eleven K Mart store managers filed a lawsuit against K Mart in the U.S. District Court for the Northern District of Georgia, Atlanta Division. Represented by private counsel, the plaintiffs alleged that K Mart had violated the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. 621, et seq. by demoting or terminating them on the basis of age. The plaintiffs also alleged separate claims of intentional infliction of emotional distress under the respective laws in their home states. Although the complaint was drafted as if the lawsuit were a class action, the lawsuit was not brought as a class action.

Ten months later, on October 29, 1992, a group of five K Mart store managers filed a second lawsuit, Helton v. K Mart Corp., also in the U.S. District Court for the Northern District of Georgia. The plaintiffs in Helton made the same allegations as the Grayson plaintiffs and were represented by the same counsel. On July 21, 1994, the District Court (Judge Marvin Shoob) granted plaintiffs' motion for leave to amend their complaint to allege an ADEA "class action" under 29 U.S.C. § 216(b), which allows other potential class members to "opt-in" as plaintiffs.

On February 22, 1994, in Grayson, the District Court (Judge Julie E. Carnes) entered an order granting defendant's motion to sever the claims of the plaintiffs on the grounds that the claims failed to satisfy the prerequisites of FRCP 20(a) and joining the cases would result in K Mart having to suffer "extreme prejudice". On August 23, 1994, the Court issued an order dismissing without prejudice the original severed actions, noting that the plaintiffs were members of the Helton class.

K Mart appealed Judge Shoob's Helton order that created the § 216(b) opt-in class as well as Judge Carnes's Grayson order that dismissed without prejudice the plaintiffs' actions. On July 20, 1994, the Eleventh Circuit Court (before Judge Gerald Tjoflat; Judge David Dyer; and Judge Leonard Garth of the Third Circuit, sitting by designation) dismissed K Mart's appeal of Judge Carnes's order, holding that the Court lacked appellate jurisdiction since the order was in effect a non-final transfer order. The Court also dismissed K Mart's appeal of Judge Shoob's order, holding that Judge Shoob's § 216(b) ruling was adequately supported by the plaintiffs' substantial allegations and evidence. K Mart petitioned for writ of certiorari, which the Supreme Court denied in a decision dated November 12, 1996: K Mart v. Helton, 519 U.S. 987 (1996).

On June 7, 1995, Judge Shoob granted the EEOC's motion to intervene in Helton. On September 25, 1997, the Court entered an order simultaneously dismissing Helton and directing that a new action be opened: EEOC v. Kmart, No. 1:97-CV-02930-MHS (N.D. GA). The case was settled on September 25, 1997, resulting in monetary damages to be allocated in a fair and equitable way by the Court among the claimants.

Jordan Rossen - 07/22/2010


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