Assistant Managers Reach $8M Deal in Petco Overtime Class Action

by Norman B. Blumenthal on October 9, 2017

blumenthal nordrehaug & bhowmik, southern california employment law, southern california employment law attorneys, overtime class action, ot class action, petco overtime class action, petco class action, overtime suit, overtime lawsuitIn the case against Petco, alleging they failed to pay assistant store managers for overtime hours, Petco Animal Supplies Inc. reached an $8 million preliminary settlement agreement that would resolve the wage-and-hour proposed class action.

Erik Kellgren, lead plaintiff, is a former assistant store manager at Petco stores in Illinois employed from 2007 through October 2010. The suit was originally filed in March of 2013 bearing allegations that Petco violated the Fair Labor Standards Act when they failed to provide workers with appropriate overtime compensation.

The case was heard by a California federal judge, who received a request for preliminary approval of the $7.995 million deal providing 900 class members with almost $9,000 each. The plaintiffs in the case described the proposed settlement amount as fair and reasonable and stated that it was an “adequate result that was the product of arms-length negotiation.”

The case was vigorously litigated for four years and was well into its second stage of discovery so both parties involved had a strong sense of their respective positions and what it would take to resolve the case.

In addition, the motion seeks certification of a settlement class that includes people who were employed as assistant managers at various Petcos in the following states: Colorado, Illinois, Massachusetts, New Jersey, New York, Oregon, and Pennsylvania anytime from 2010 through 2016.

When making their case for preliminary approval, plaintiffs stated that the close to $8 million settlement number added up to about 93% of the proposed class’ liquidated damages.

In 2014, Petco filed a motion to dismiss. The motion was denied by U.S. District Judge M. James Lorenz, arguing that the March 2013 suit was time-barred due to the FLSA’s two-year statute of limitations and/or that the complaint was not pled sufficiently. The judge ruled that it was sufficiently alleged that Petco willfully or recklessly disregarded the improper classification of assistant store managers as exempt from overtime – in direct violation of the FLSA.

Petco sought to have the suit dismissed a second time based on arguments that Kellgren’s complaint was devoid of facts. While partially granting dismissal, the judge also allowed the plaintiff to amend the complaint to include allegations that Petco’s violation of the FLSA was willful. Petco rejects this assertion. In the amended complaint, Kellgren alleges that Petco failed to offer labor budget funds and consider the impact of the underfunded labor budgets on the job duties of himself and other assistant managers as well as failing to allow them to appropriately document their hours or post required notices regarding minimum and overtime wages law.

If you have questions about wage and hour law or overtime requirements, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

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