Rite Aid Corp. has agreed to pay up to $20.9 million to settle allegations that the company failed to pay proper overtime wages to assistant managers and co-managers.
The plaintiffs in 15 wage and hour collective and class-action lawsuits alleged that Rite Aid misclassified its assistant store managers and co-managers, and sought overtime pay for hours worked in excess of 40 hours a week. The plaintiffs contended that overtime pay was required by federal law and the laws of certain states. The settlement resolves claims for damages dating back as far as 2002 and covers more than 6,000 current and former associates.
Rite Aid denied any wrongdoing and said it believes its previous classification of assistant managers and co-managers as exempt employees is compliant with state and federal law.
Rite Aid, the No. 3 U.S. drugstore chain behind Walgreen Co. (WAG) and CVS Caremark Corp. (CVS) has had its same-store sales improve in recent quarters with help from the rollout of a loyalty program as well as store renovations under a new format that expands clinical pharmacy services and offers more health and wellness products.
Rite Aid in April reported its fiscal fourth-quarter loss with a boost from an extra week of sales and a tax benefit in the latest period.