Judge Says Cert. Likely In Ex-Rite Aid Workers' Late Pay Suit

Los Angeles
June 14, 2012
Jonathan Randles

Law360, Los Angeles (June 14, 2012, 4:11 PM ET) -- A California state judge on Thursday said in a tentative ruling that he would certify a statewide class of former Rite Aid Corp. employees who claim they weren't immediately paid all final wages they were owed at the time they were fired.

Judge Robert H. O'Brien said there were common issues of fact to certify the class of Rite Aid employees. The proposed class includes thousands of former California Rite Aid employees who worked at the drug store chain beginning in February 2007, according to court documents.

If the ruling becomes final, it would be a significant boost for the former workers' claims that Rite Aid violated California's final pay and waiting time laws when it failed to pay terminated employees earned wages in a timely manner. The allegations could cost the drugstore chain millions in damages and penalties.

The lawsuit seeks waiting time penalties under California's labor code and civil penalties under the Private Attorney's General Act.

The complaint was originally filed Feb. 5, 2010, against Rite Aid and Thrifty Payless Inc. on behalf of named plaintiffs Darryl Quick and Juan Sandoval. The company terminated Sandoval from his assistant manager position at Rite Aid after he admitted to committing coupon fraud, according to the suit.

Sandoval claims Rite Aid failed to timely pay him all of his earned and unpaid wages when he was discharged, according to court records. Quick, who said he was paid late after being terminated for failing to show up for work while he was in jail, is no longer a member of the class, according to court documents.

If Judge O'Brien adopts his tentative ruling, it would certify a class of more than 8,000 employees terminated by Rite Aid during the class period, the company said. Rite Aid, which has approximately 600 stores across the state, said it pays all terminated employees within 72 hours as required under California law.

The proposed class would include former Rite Aid employees who were fired from the company for a variety of reasons, including missed work days or tardiness, substandard job performance, violation of company policy or falsification of employment information. Temporary Rite Aid employees and workers who were either laid off or lost their jobs because of a store closing would also be included in the class, according to the lawsuit.

Rite Aid has hundreds of written policies concerting working conditions for employees that cover overtime pay, meal periods, leaves of absence and vacations, according to court documents. But the company didn't have a written policy regarding payments of final wages to recently discharged California employees until the lawsuit was filed, the workers claim.

Michael D. Early of Kelly Hockel & Klein PC, who represents Rite Aid, argued that recently terminated employees could receive their final wages at one of three specific dates: the last day they clocked out for work, the termination date or when the decision to terminate an employee has been made.

The different dates should defeat class certification because it would make it difficult to determine when individual employees were let go and what penalties Rite Aid could potentially face if it's discovered the company didn't comply with California's labor laws, he said.

Judge O'Brien took arguments under submission before delivering a final ruling.

The employees are represented by the Law Office of Louis Benowitz, by Shaun Setareh and Hayley Schwartzkopf of the Law Office of Shaun Setareh, and by David Spivak of The Spivak Law Firm.

Rite Aid is represented by Michael D. Early, Jonathan Allan Klein, Mary J. Bosworth and Jessica R. Madrigal of Kelly Hockel & Klein PC.

The case is Darryl Quick et al. v. Thrifty Payless Inc. et al., case number BC431249, in the Superior Court of the State of California, County of Los Angeles.

--Editing by Eydie Cubarrubia.

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