Judge Approves Overtime Pay Class Action Settlement for Duane Reade

A federal judge in New York has issued his stamp of approval for an overtime pay class action settlement against drugstore chain Duane Reade.

The $13.6 million settlement will resolve claims that the chain neglected to pay overtime wages to employees who were classified as assistant store managers at the Walgreens subsidiary.

However, U.S. District Judge J. Paul Oetken refused to approve a provision of the settlement that aimed to limit references to the lawsuit and related overtime pay class action settlement on the social media pages or website of class counsel.

The settlement initially read, “If approved by the Court, Class Counsel and Defense Counsel will agree to remove all existing web pages or entries on web pages or social media that invite members of the Class or Collective to participate in this Litigation and, if approved by the Court, will limit references to this settlement on their websites or in any social media or other media format to the name of the case and the fact that it was class wide settlement for Assistant Store Managers.”

In his response to rejecting that part of the settlement Judge Oetken stated, “Moreover, restrictions on attorney disclosure risk running afoul of ethical prohibitions on settlement agreements that restrict a lawyer’s right to practice, including representation of other, future clients.”

In addition to the $13.6 million settlement, the overtime pay class action settlement will award class counsel $4.5 million to cover attorneys’ fees and an additional $246,864.76 in related costs and expenses related to the lawsuit.

Judge Oetken granted certification to the class in March 2013, and shortly thereafter, the drugstore chain filed a motion for reconsideration after the Comcast Supreme Court ruling. That ruling decided that calculations of individual damage would effectively “overwhelmed” questions that were common to the class as a whole.

In August of that year, Judge Oetken revised his ruling, partially modifying the previous one. He decided that for liability purposes, assistant managers would remain in a class, but those same assistant managers would have to prove their damages on an individual basis. In February 2015, the Second Circuit Court of Appeals affirmed the decision from Judge Oetken.

Last year, Duane Reade filed a motion to decertify the class of assistant managers. But in June 2016, Judge Oetken declined the motion.

In 2009, an overtime pay class action settlement was also reached against Duane Reade to resolve similar allegations. The previous lawsuit alleged that assistant store managers were improperly classified as being exempt from overtime pay despite working more than 50 hours per week.

The same group of employees brought the second lawsuit in 2011, claiming that despite the previous lawsuit ending in an overtime pay class action settlement, the scheduling practices of Duane Reade had not changed and thus continued, with workers failing to be appropriately compensated.

The Duane Reade Employee Misclassification Lawsuit is Mani Jacob et al. v Duane Reade Inc. et al., Case No 1:11-cv-00160, in the U.S. District Court for the Southern District of New York.

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