Whole Foods Must Defend Claims About Incentive Program

From Labor & Employment on Bloomberg Law

March 16, 2018

By Lawrence E. Dubé

Whole Foods Market Group Inc. must defend itself against claims that it denied employees in several states bonuses they were due under a company “gainsharing” program, a federal court in Washington ruled.

Employees alleged that managers manipulated the program by shifting labor costs and altering employee time records. Whole Foods admitted the improper practices but claimed they only occurred at nine of the company’s 457 stores. The employees alleged in their lawsuit that Whole Foods tried to “buy peace” by offering “small sums” to workers, but they filed a proposed class action against the grocery company.

The court hasn’t yet ruled on their proposal that the lawsuit be handled as a class action on behalf of employees who worked for the company in the District of Columbia and Maryland.

Meant to Reward Savings

Michael Molock and other employees worked in stores where Whole Foods publicly admitted that workers were deprived of bonuses they earned under the program, according to the decision. The program was intended to award bonuses to employees whose departments performed under budget by automatically distributing surplus savings among employees in the department.

Judge Amit P. Mehta of the U.S. District Court for the District of Columbia refused March 15 to dismiss contract and fraud claims as well as allegations that withholding bonuses employees earned under the incentive program violated District of Columbia and Maryland wage payment laws.

Whole Foods argued that bonuses based on the performance of employee teams couldn’t be considered individual wages under the city and state laws, but Mehta disagreed. Michael Molock and other former employees allege bonuses weren’t discretionary, and Mehta said they were allegedly “presented as part and parcel of the employee compensation package at Whole Foods grocery stores.”

Mehta denied the company’s motion to dismiss the wage claims as well as allegations the company breached oral promises to employees and misrepresented facts by assuring employees they would receive gainsharing awards.

Attorneys representing the employees didn’t respond immediately to a request for comment on the decision. An attorney for Whole Foods declined to comment.

Regan Zambri & Long PLLC in Washington represents the employees. Greenberg Traurig LLP in Austin, Texas, represents Whole Foods.

The case is Molock v. Whole Foods Mkt., Inc., 2018 BL 89147, D.D.C., No. 16-cv-02483 (APM), 3/15/18.


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