Rite Aid Settles Managers’ Overtime Suit for $20.9 Million

Rite Aid Corp. (RAD), the third-largest U.S. drugstore chain, said it agreed to pay as much as $20.9 million to resolve allegations that it misclassified certain managers as being exempt from laws requiring they be paid for overtime.

The accord, which is subject to court approval, resolves claims for damages dating back as far as 2002 and covers more than 6,000 current and former associates, the company said in an e-mailed statement. The company faced 15 lawsuits.

“This is an excellent result for the present and former Rite Aid assistant managers and co-managers who will benefit from it because the settlement will provide a definite and sure recovery long before any possible payment could be achieved through continued litigation,” said Seth Lesser, lead plaintiffs’ counsel. “The settlement, if approved, will avoid the possibility of adverse rulings or even no recovery at all.”

The company and lawyers for the workers believe the settlement is fair and reasonable, according to the company’s statement.

Rite Aid said it believes that its previous classification of assistant managers and co-managers as exempt was lawful and denied any wrongdoing in the global settlement.

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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