Potentially ending a long, complicated case, Kmart and a class of cashiers from two California stores have reached an agreement to end a lawsuit alleging violations of state labor law.
The suit was originally filed on behalf of all cashiers in the state of California over the retailer's failure to provide seated workstations in violation of California Wage Order 7-2001(14), which reads: "All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats." The case was narrowed to a class from a single store in Tulare, Calif., and Kmart prevailed in a bench trial.
However, the court then granted certification to a second one-store class of Redlands cashiers in June. Trial was scheduled to begin in September.
Now the parties have reached a settlement deal that would pay no more than $280,000 to both classes of plaintiffs, a total of 233 individuals. The dollar amount includes compensation for class members, incentive awards to class representatives, counsel fees and other administrative costs, and payments to the California Labor and Workforce Development Agency. After $5,000 each for the class representatives and $185,000 in expenses for class counsel (who agreed not to seek fees in the case), the remaining class members would receive about $75 each.
Judicial approval of the deal is still required - and appears doubtful.
After the parties notified U.S. District Court Judge William Alsup of the Northern District Court of California of their tentative agreement, he ordered further briefing and expressed his doubts about the terms of the deal.
"The parties' proposed settlement appears to be little more than reimbursement of class counsel's expenses in exchange for a class-wide release," he wrote in an order. "Under the proposal, the class members would receive only token sums (except for the class representatives, who would hit bonanzas)," he wrote. "It is unlikely that the Court will give preliminary approval to this settlement."
Why it matters: The case's long and winding road continues. If Judge Alsup declines to approve the settlement, the parties could continue to negotiate or face off in a second trial in September. The deal would also leave open the possibility of other cashier seating litigation against Kmart, as the court specifically asked the attorneys whether the deal and its attendant release would impact other plaintiffs; the parties answered in the negative. California has been a hotbed of "suitable seating" litigation, with similar suits filed against companies like Bank of America, CVS Pharmacy, Rite Aid, Target Corp., and Wal-Mart. The courts have struggled with the cases, reaching varied results. Judge Alsup certified a one-store-only class of cashiers while another court certified a class of 22,000 Wal-Mart employees and a third refused to certify 1,000 tellers in a suit against Bank of America.