Class action against Pennsylvania-based Rite Aid settled for $20.9 million

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A federal judge in the Middle District of Pennsylvania has approved a $20.9 million settlement in a wage-and-hour class and collective action against Pennsylvania-based Rite Aid Corp., stemming from unpaid overtime.

The judge's approval brings a formal end to the years-long labor case.

U.S. District Judge John E. Jones III's final approval in the consolidated cases of Craig v. Rite Aid settles 14 class and collective actions brought across the country against Rite Aid, over allegations the drugstore chain improperly designated assistant store managers and co-managers as exempt employees not eligible for overtime pay.

The employees stand to collect $1,800 on average.

The settlement puts to rest four years of litigation that included one of the cases -- Knepper v. Rite Aid -- going up to the U.S. Court of Appeals for the Third Circuit for a determination that collective action claims under the Fair Labor Standards Act and class action claims under state wage-and-hour laws can be brought in the same action.

Out of the 14 consolidated class and collective actions -- which touched upon 4,700 Rite Aid stores and created a 7,426-member class across 31 states -- about 4,000 of the potential class members have filed claims against the settlement fund, according to lead plaintiffs' counsel Seth Lesser of Klafter Olsen & Lesser in Rye Brook, N.Y.

The class members will get paid based on the amount of hours worked during the applicable period. They are expected to get, on average, $1,845 per class member, Judge Jones said in his opinion.

Plaintiffs counsel will share in about $6.7 million in attorney fees and nearly $275,000 in costs. There were 12 firms that worked on the case for a total of more than 14,000 hours since the case was filed in 2008.

"We're extremely happy that this case has ended after many years of hard-fought litigation,," said Peter Winebrake of Winebrake & Santillo.

Rite Aid is based in Camp Hill, Pa., near Harrisburg.

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Gina Passarella: gpassarella@alm.com or 215-557-2494. To read more articles like this, visit www.thelegalintelligencer.com.


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