Whole Foods announced that it has settled a class-action lawsuit claiming that company manipulated an employee bonus program which resulted in lower payouts to its employees. The settlement comes almost 10 years after the allegations were brought against the grocery chain giant.
The original lawsuit alleged that multiple Whole Food managers regularly transferred costs from one department to another in order to circumvent its “Gainsharing” program, which provides bonuses to employees whose departments come in under budget. The managers effectively reallocated expenses from deficit-running teams to those with surpluses in order to reduce the reported surpluses and avoid triggering bonus payments tied to them.
After the lawsuit was filed, Whole Foods fired nine managers in Washington D.C., Maryland, and Virginia who were alleged of engaging in the cost transfers. The lawsuit additionally claimed that the grocery chain’s unlawful practice ranged nationwide and “a decision made at the executive level … to pad company profits.” While Whole Foods admitted to wrongdoing tied to the nine managers, it denied the claim that such actions occurred nationwide.
This settlement comes after the judge of the case denied the workers’ request to certify a class of all employees that had not received proper compensation under the Gainsharing program. The class was to consist of more than 5,000 employees from the nine stores and more than 147,000 employees nationwide. The judge ultimately denied the request stating that it would be too difficult to certify the class since each employee had his or he own individual issue. Additionally, the workers did not show that all potential class members were not properly paid by Whole Foods alleged practice.
The workers and Whole Foods requested 60 days in order to finalize the terms of the settlement as they have not done so already. 