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NY Judge Signs Off On $13.5M Duane Reade OT Deal

Law360—Adam Lidgett

A New York federal judge on Friday approved a $13.5 million deal to settle a class action alleging the Duane Reade drugstore chain didn’t pay overtime wages to assistant store managers, but he refused to sign off on a provision that would have limited references to the case on the class counsel’s web or social media pages.

U.S. District Judge J. Paul Oetken signed off on the settlement that would end overtime pay litigation between workers and the Walgreens Co. subsidiary that has been ongoing since January 2011.

But he rejected the measure to restrict internet mentions of the case, saying it runs counter to the “well-settled” principle that confidentiality provisions in Fair Labor Standards Act settlements are contrary to public policy.

“Moreover, restrictions on attorney disclosure risk running afoul of ethical prohibitions on settlement agreements that restrict a lawyer’s right to practice, including representation of other, future clients,” Judge Oetken wrote.

He awarded class counsel $4.5 million in attorneys’ fees plus $246,864.76 in costs and expenses.

A lawsuit over similar allegations — that Duane Reade Inc. had improperly classified the assistant store managers who worked more than 50 hours a week as exempt from overtime pay — was settled in 2009. Workers brought the second lawsuit in 2011 because they alleged that the company had not actually changed its scheduling practices after the 2009 settlement.

In January 2012, the judge conditionally certified a collective action under the Fair Labor Standards Act.

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In June 2016, Judge Oetken turned back a motion from Duane Reade to decertify the class of workers.

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The plaintiffs are represented by Adam T. Klein, Molly A. Brooks and Michael J. Scimone of Outten & Golden LLP, Seth R. Lesser and Frank L. Rudich of Klafter Olsen & Lesser LLP and Jeffrey Gottlieb and Dana Gottlieb of Gottlieb & Associates.

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The case is Mani Jacob et al. v. Duane Reade Inc. et al., case number 1:11-cv-00160, in the U.S. District Court for the Southern District of New York.