Class Cert. Denied to Fresh & Easy Employees in PTO Lawsuit

A bankruptcy judge in Delaware denied class certification to a group of employees who were laid off from Fresh & Easy following the company’s bankruptcy.

The plaintiffs claimed that the grocery chain denied payment of unused paid time off to employees in certain states but not others.

U.S. Bankruptcy Judge Brendan L. Shannon ruled that granting class certification to former employees would not be of benefit to any parties, but he will allow individual lawsuits to be filed in light of Fresh & Easy’s bankruptcy proceedings.

“The cost to the estate could be substantial… and any foreseeable benefit for the class would be minimal,” Judge Shannon stated. “This is not a case that is flush with cash.”

Plaintiff Darlene Lewis filed the lawsuit against Fresh & Easy last month. Lewis was a former hourly employee of a Las Vegas store who was one of many affected by the layoff last fall after Fresh & Easy filed bankruptcy.

Lewis claimed that Fresh & Easy told employees that they would not lose any PTO days when they separated from the company for any reason. However, Lewis claimed in her separation letter that Fresh & Easy provided to her last October that the company said they would only pay employees in California for their accrued and unpaid PTO, and that Nevada and Arizona employees would not receive pay for these benefits.

Lewis claimed that she had 60.57 hours of PTO accrued at the time she was laid off, and with a $11 an hour wage, the company owes her $666.27. Lewis sought to represent other hourly employees in Nevada and Arizona who had unused PTO at the time of their separation from the company who were not paid for it.

Judge Shannon said he used three different factors when considering the ruling on the denial of class certification for the case. He said that the class neglected to file claims before the company filed for bankruptcy though its Chapter 11 petition, the Class Members had ample notice of the bankruptcy’s bar date to file proofs of claim during that timeline, and that the date had passed before the complaint on behalf of the class was filed.

By granting class certification Shannon found that that it would add “unnecessary” layers and adversely interfere with the administration of the Chapter 11 case and thus based his denial partly on that finding.

Fresh & Easy argued that the arbitration clause would prohibit any class action claims from proceeding, and that Lewis had not filed an actual lawsuit claiming that she and other workers who were laid off due to store closings have been denied their unused earned vacation days.

This proposed class action was not the only one Fresh & Easy is facing. Another group of former employees in California have claimed that they were not given the required 60 day notice under California state law.

Plaintiff Darlene Lewis is represented by Edward J. Kosmowski of the Law Office of Edward J. Kosmowski, LLC, and Mark R. Thierman, Joshua D. Buck, and Leah L. Jones of Thierman Buck LLP.

The Fresh & Easy Paid Time Off Class Action Lawsuit is Darlene Lewis v. Fresh & Easy LLC, Case No. 15-12220, in the U.S. Bankruptcy Court for the District of Delaware.

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