The putative class of CVS Pharmacy Inc. employees, who allege that CVS failed to pay accrued vacation and unused holiday wages, is urging a California federal court to accept a proposed settlement of $400,000 for their claims. The central allegation is that because of CVS’s policy of accruing vacation time on a monthly basis, it failed to pay workers at two of its distribution centers for vacation they accrued in their final month prior to termination.
For example, if a worker was terminated on November 20, 2012, CVS only paid her for her accrued vacation time through November 4, 2012. The employees allege that this constitutes a violation of several California labor and business laws. Additionally, the employees allege that that CVS failed to pay terminated employees for unused “floating” holiday pay upon termination.
As part of the settlement, CVS will not acknowledge any wrongdoing on its part. Instead, CVS states in the proposed settlement that “CVS has concluded that any further defense of this litigation would be protracted and expensive for all parties.” The case, however, provides a potentially cautionary message to employers that have monthly vacation accrual policies.
The settlement will extend to employees whose employment ended between January 2009 through October 31, 2015. The named plaintiff would receive an incentive award of up to $5,000 and the attorneys would collect $100,000 in fees and costs. The case is Nieves et al. v. CVS Pharmacy Inc. et al., case number 1:14-cv-00964, in the U.S. District Court for the Eastern District of California