Rite Aid Corp. has agreed to pay $20.9 million to settle Fair Labor Standards Act class claims lodged by assistant store managers, who claim they were wrongfully classified as overtime-exempt. The parties asked the federal court in the Middle District of Pennsylvania to approve the settlement, which will dismiss the claims in 14 other lawsuits filed in state and federal courts across the country alleging Rite Aid failed to pay its assistant store managers and co-managers time-and-a-half overtime pay.
“The proposed settlement is an omnibus settlement that would, if approved, constitute the end of several years of dogged litigation – literally coast to coast from Portland, Maine to Portland, Ore. – in which both sides, believing they were correct, litigated the propriety of Rite Aid’s classification of co-managers and some assistant store managers as ‘exempt’ from overtime pay requirements,” the motion for preliminary approval stated.
Under the terms of the settlement, Rite Aid will pay $20.9 million to a nationwide settlement class of assistant store managers and co-managers. That figure includes an incentive payment of up to $7,500 for class representative Shirley Craig and up to $5,000 for the lead plaintiffs in the 14 other cases.
The settlement resulted after years of litigation and over eight months of mediation. The putative settlement class is estimated at 6,100 members nationwide, each of whom will likely receive an average of $2,000, according to settlement documents. Rite Aid did not admit liability in the settlement.
Craig, whose case was the first of the many filed around the country, sued in December 2008, seeking a judgment that Camp Hill, Pa.-based Rite Aid had violated the FLSA. She also sought injunctive relief, unpaid wages, damages and other relief.
According to the suit, Craig, of Brownsville, Ga., and other assistant store managers were wrongfully classifed as exempt from overtime pay because they performed work that required little skill and no capital investment, and their primary duties didn’t include managing either an assigned store or any department or subdivision thereof.