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LABOR & EMPLOYMENT LAW — 6/13/08

Stores settle wage and hour class action for 15 million

Almost 200,000 former California employees of Albertson's, Lucky Stores and Sav-on Drug Stores (all now owned by SuperValu, Inc) will share $15 million to settle a class action alleging that the companies failed to pay the employees their final wages on their last day of work in violation of the California Labor Code, according to a court notice mail to employees on May 14, 2008 (Ward v Albertson's, Inc, CalSupCt, No BC 237646, notice May 14, 2008).

The settlement agreement, which was preliminarily approved April 14 by Judge Elizabeth A. White of the California Superior Court of Los Angeles County, provides that any employees who quit or were discharged at Albertsons, Lucky and Sav-on stores in California between September 29, 1996, and December 31, 2004 will receive up to $350 based on their final wage rate. The settlement also resolves claims by a smaller subclass of non-union, California employees that the three companies failed to pay all vacation pay owing when the subclass members ended their employment. Payments will be 50 percent cash and 50 percent in merchandise cards redeemable at Albertson's stores. Additional payments will be made to non-union employees who were not paid all their accumulated, vested vacation pay upon termination. The 11 named plaintiffs will received up to $10,000 and $3.5 million in attorneys' fees and costs to plaintiffs' counsel will be paid out of a separate fund. A final hearing will be held August 18 to give final approval to the settlement.

The litigation was originally filed in September 2000 by the United Food and Commercial Workers Local 324 in Orange County, California, which represents grocery and pharmacy employees. The California Labor Code states that an employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination or within 72 hours of the employee's resignation. An employer who willfully fails to pay any wages due to a terminated employee (discharge or quit) in the prescribed time frame may be assessed a waiting time penalty. The waiting time penalty is an amount equal to the employee's daily rate of pay for each day the wages remain unpaid, up to 30 calendar days. More information on the settlement can be found at the following website.

For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.

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