Walgreens Employees Reach Settlement in Class Action Suit

Bloomberg reported that a federal judge for the United States District Court for the Eastern District of California granted preliminary approval of a $4.5 million settlement between Walgreen Co. and 2,650 of its California employees. The lead plaintiff, Lucas Mejia, an hourly stocker at a Walgreen distribution center, filed the putative class action lawsuit on Nov. 6, 2018, against the defendant, Walgreen Co. in the Superior Court for the County of Yolo alleging violations of the California Labor Code. According to the complaint, the pharmacy store chain:

1. "failed to pay wages to employees at the applicable minimum wage or overtime rate for all hours worked in violation of California Wage Orders and California Labor Code sections 510 ,1194 , 1197 , and 1198;
2. failed to provide all legally required and legally compliant meal and rest periods in violation of California Wage Orders and California Labor Code sections 226.7, 512, and 1198;
3. failed to provide complete and accurate wage statements in violation of California Labor Code section 226; and
4. failed to timely pay final wages to employees after separation of employment in violation of California Labor Code sections 201, 202, and 203."

Allegedly Walgreen's unlawful employment practices included failing to pay non-exempt employees with all of the compensable time they had worked. For example, the plaintiffs claimed that Walgreens "rounded down employees' hours on their timecards, required employees to pass through security checks before and after their shift without compensating them for time worked, and failed to pay premium wages to employees who were denied legally required meal breaks."  

On Jan. 18, 2019, Mejia amended his lawsuit to add a claim for civil penalties under the Private Attorneys General Act (PAGA) based on Walgreens' alleged violations of the California Labor Code. According to the State of California Department of Industrial Relations, the Labor Code PAGA "authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations."

Robert T. Matsui Courthouse Fountain

As proposed, the Settlement Agreement will release all claims asserted in this action by the settlement class, defined as "any current or former hourly non-exempt employees who worked at any of [d]efendants' California distribution centers at any time from November 6, 2014 to June 2, 2020."

The company agreed to pay up to $4.5 million "to create a common fund, from which payments will be made for:

1. attorney's fees in an amount up to $1,500,000, or 33% of the fund;
2. litigation costs incurred by class counsel, estimated at $15,000;
3. an incentive award for plaintiff of $7,500;
4. settlement administration costs estimated at $35,000; and
5. the payment of $150,000 for civil penalties under the PAGA. 
6. The remaining funds ("Net Settlement Amount"), estimated at $2,830,000, will be distributed to class members who do not opt-out of the settlement.

Judge William B. Shubb scheduled a final fairness hearing on Monday, March 22, 2021, at the Robert T. Matsui United States Courthouse in Sacramento "to determine whether the proposed settlement is fair, reasonable, and adequate and should be approved by this court; to determine whether the settlement class's claims should be dismissed with prejudice and judgment entered upon final approval of the settlement; to determine whether final class certification is appropriate; and to consider class counsel's applications for attorney's fees, costs, and an incentive award to [the] plaintiff."