Costco Employee Files $50 Million Class Action

Posted May 9th, 2009.

Wage and Hour Issues, False Imprisonment Described in California Complaint

For more information, contact Jamie Moss, newsPRos,201-493-1027

(May 15, 2009, San Diego, CA) – Giant retail chain Costco keeps something in its California warehouses that customers don’t know about. According to a class action complaint filed today in California Superior Court in San Diego County, it’s the company’s hourly employees who have been forced to clock out of work and want to go home, but are routinely and regularly prevented from doing so.

Mary Pytelewski, a full-time clerk who’s worked nearly a decade in Costco’s warehouse in San Marcos, CA, filed the suit today on behalf of herself and all other similarly situated Costco employees.

She and the class are represented in the matter by David W. Sanford and Steven L. Wittels of Sanford Wittels & Heisler LLP and Ed Chapin and Jill Sullivan, Of Counsel to Sanford Wittels & Heisler LLP, along with other affiliate counsel. Mr. Sanford is resident in the firm’s Washington, DC office; Mr. Wittels is resident in the firm’s New York City office; and Mr. Chapin and Ms. Sullivan are resident in San Diego.

According to Ms. Pytelewski’s legal team, the suit stems from a scheme by Issaquah, Washington-based Costco Wholesale Corporation to deny its California employees compensation and overtime benefits due to them under state law. The heart of the scheme involves locking hourly employees inside each warehouse every night for approximately 15 minutes after they have finished work and are off the clock. During this period, the stores’ managers perform closing activities, such as removing jewelry from display cases and emptying cash registers.

“Costco makes the false claim that locking these employees inside its warehouses until store managers and supervisors complete their closing routines is necessary for store security,” said Mr. Sanford. “That meets the legal definition of ‘false imprisonment’ because employees are being held against their will. Costco does not count this time as work and it will not compensate hourly employees for the time they spend each night waiting for supervisors and managers to complete their tasks.”

Costco is the largest wholesale club operator in the U.S. and has some 100 stores in California.

Ms. Pytelewski has worked at Costco since 2001, when she began as a part-time seasonal assistant. According to the legal team, she has made numerous complaints to Costco’s management about these violations of California’s wage and hour laws and other unlawful practices. “The upshot of her individual claim is the company took retaliatory action against her,” explained Mr. Wittels. “They wrote her up for so-called discrepancies in her cash drawers, placed her on two unofficial ‘probations,’ and posted a supervisor as a guard at her cash register. But at no time did Costco address the wage and hour issues she raised or her very legitimate concern about being detained on a nightly basis against her will.”

The Complaint asserts that the class includes several hundred or more Costco employees, geographically dispersed throughout California, all of whom work or have worked overtime on a daily and weekly basis without the compensation due to them. Costco’s employment practices are described as violating the California Labor Code, the California Industrial Welfare Commission Occupational Wage Order, and the Unfair Competition Law, Business and Professions Code.

“Costco is building its business and its competitive advantage at my expense and at the expense of all of its other hourly workers,” said Ms. Pytelewski. “I pursued every avenue I could to remedy this situation through the channels the company makes available, but I was rebuffed and ridiculed at every turn. I want pay that I’m owed from Costco for the time I’ve been required to stay after clocking out, and I want the company to stop locking me in the warehouse every night when my shift is over.”

The Complaint requests a finding by the Court that Costco’s violations of California employment laws have been willful and asks for damages of not less than $50 million for Ms. Pytelewski and the class. It also asks the Court to enjoin Costco to cease and desist from all of its unlawful and unfair employment practices, as well as for compensatory damages for its practice of false imprisonment, compensatory damages for its retaliation against Ms. Pytelewski, attorneys’ fees and court costs.

The Complaint also demands a jury trial.