The Rite-Aid drugstore chain, based in Camp Hill, will end 14 different overtime lawsuits with one huge settlement of more than $27 million.
Plaintiffs had alleged the company misclassified assistant managers and co-managers to avoid paying them overtime. Rite-Aid agreed to settle despite denying any wrongdoing. It claims most of the complaints arose from former employees of Eckerd Drug Stores. Rite-Aid acquired the Eckerd stores in 2007.
The affected employees will split $20.9 million, with the average plaintiff collecting $1,800. A separate settlement for California employees will come later.
The court also awarded attorneys’ fees of close to $7 million.
Note: Taking over a company means you’re taking over its pay practices—and liabilities. As part of your due diligence, review wage-and-hour compliance and make changes if necessary so bad practices don’t haunt you.