Costco Overtime Settlement Ends in $9M Deal

A Costco overtime settlement has been reached in the amount of $9 million to resolve claims in a proposed class action lawsuit. The plaintiffs in the class action lawsuit were pharmacists employed by Costco working in the San Diego area.

The pharmacists stated that Costco required them to remain on call in the pharmacy area during the time of their rest breaks and pressured employees to work overtime without receiving financial compensation, according to the lawsuit.

In the motion for the preliminary Costco overtime settlement approval, the warehouse giant stated it would pay close to $5,000 to each of the estimated 1,175 pharmacists and pharmacy managers who had worked with the company any time from April 2010 to the present.

The motion for approval says that “by settling now rather than proceeding to trial, class members will not have to wait (possibly years) for relief, nor will they have to bear the risk of class certification being denied or of defendant prevailing at trial.”

The Costco overtime lawsuit was originally filed back in April 2014 by pharmacists who stated that if they were working at the store alone, the company required them to remain on call during break periods so they could be reached to respond in situations where they might be needed to perform tasks that legally only a pharmacist could perform.

In addition to claims about not being able to take proper rest periods, the pharmacists alleged that policy dictated by Costco discouraged pharmacists from working overtime hours.

“[T]hus class members felt pressure to work off-the-clock before the start of and after the end of their scheduled shifts and while away from the workplace in order to complete their assigned tasks without facing potential discipline for clocking overtime,” the motion to approve the Costco overtime settlement stated.

Additionally, the motion stated that there was an expectation that pharmacists answer emails and text messages outside of their paid work hours.

The Costco overtime settlement was reached as a result of the mediation process that began in March. Under the terms of the settlement, a total of $5.8 million would be given to pharmacists and pharmacy managers in an amount that was proportionate to the number of shifts worked since April 2010.

The motion detailing the Costco overtime settlement also indicated that the two plaintiffs who were initially named in the lawsuit were replaced when an amended complaint was filed in the case.

The motion for preliminary settlement approval also stated that the plaintiffs apparently had agreed to participate in the mediation process by giving oral agreement, yet refused to sign a memorandum of understanding that would allow the mediation process to proceed. As a result, new class representative plaintiffs were selected after the attorneys stated they had unsuccessfully tried to address the concerns with the original plaintiffs, the motion for preliminary approval of the Costco overtime settlement noted.

The Costco Overtime Settlement Lawsuit is Dittmar v. Costco Wholesale Corp. et al., Case No. 3:14-cv-01166, in the U.S. District Court for the Southern District of California.

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