November 26, 2020
A recent Law 360 story by Lauren Berg, “Calif. Walgreens Workers Bag $4.5M Wage Deal,” reports that Walgreens and a class of workers have received a California federal judge's approval for their $4.5 million settlement to resolve claims that the pharmacy chain broke Golden State labor law by not paying all wages to employees at its distribution centers. U.S. District Judge William B. Shubb granted preliminary approval to the class action settlement that will see about 2,600 workers split $2.8 million, finding that the deal is fair and gives the workers a good recovery that might have been at risk had the case gone to trial.
Lucas Mejia, who worked as an hourly stocker for about seven years at a Walgreens distribution center in California, launched the class action in November 2018 in the Superior Court for the County of Yolo, alleging that the company failed to pay employees for all of the compensable time they worked. Mejia said Walgreens rounded down employees' hours on their timecards, required employees to pass through security checks before and after their shift without paying them for that time and didn't pay premium wages to workers who were denied meal breaks.
The suit also included a claim for civil penalties under the Private Attorneys General Act based on Walgreens' alleged violations of California labor law. The case was eventually removed to federal court in Sacramento. In December, the parties started talking with a mediator, which produced the current settlement.
In exchange for releasing all of the claims, Walgreens has agreed to pay up to $4.5 million to create a common fund, from which $2.8 million will be distributed to the estimated 2,648 class members, according to the order filed. Each class member who does not opt out is estimated to receive about $1,200, the judge noted.
Also out of the pot, $1.5 million, or 33% of the fund, will be set aside for attorney fees, while $150,000 will go to pay PAGA penalties and $7,500 will be used as an incentive award for Mejia. Another $50,000 will be used to pay litigation costs incurred by class counsel and settlement administration costs, according to the order. Judge Shubb gave preliminary approval to the deal, finding that it is in the best interest of the class.
While Mejia's counsel said the labor claims could be worth up to $20.2 million and the PAGA claim up to $16 million, they said Walgreens had legitimate defenses that risked reducing the amount Mejia and the class could recover at trial, according to the order. With that in mind, the settlement is a strong result for the class, the attorneys said, with the $4.5 million representing 22% of the potential damages.
The judge also noted that, while the deal sets aside 33% of the fund for attorney fees, Mejia's counsel said they will seek 25% of the fund in a separate motion for fees. "The court will defer consideration of the reasonableness of counsel's fees until the fee motion is filed," the judge wrote. "Class counsel is cautioned that the reasons for the attorney's fees should be explained further in that motion."