WASHINGTON (CN) — Employees say in a nationwide federal class action that Whole Foods stores manipulated a bonus program to stiff workers of money they earned in a profit-sharing program — and they want $200 million in damages.
Whole Foods told The Associated Press this month that it withheld the bonuses at only nine of its 467 stores, lead plaintiff Michael Molock says in the Dec. 20 lawsuit. But Molock says that’s not true.
“Whole Foods engaged in a nationwide scheme to strip hard-working employees of earned bonuses in order to maximize their own profit,” he says in the complaint. “Whole Foods stole employee bonuses as part of its ‘Gainsharing’ program through a corporate practice known as ‘shifting labor costs.’”
Molock and the putative class says the practice of shifting money between store departments to avoid paying bonuses is prevalent nationwide.
Whole Foods employees can earn Gainsharing bonuses if the department to which they are assigned comes in under budget. Under the program, any such budget surplus is to be divided among that department’s employees as a bonus, according to the complaint.
But Whole Foods shorted its employees by shifting labor costs between departments, canceling surpluses for well-performing departments and refusing to pay the bonuses, which the class members say were instrumental in their decisions to join the company.
“Rather than pay plaintiffs (and those similarly situated) the bonuses they earned through the 'gainsharing' program, Whole Foods retained the surplus for its own benefit and to increase its profit margin,” the complaint states.
Whole Foods acknowledged the practice in a Dec. 13 Associated Press article, saying it had fired nine store managers it had found tinkering with the bonus system. The Washington Post also reported that the company said it had isolated the practice to nine stores, according to the complaint.
But Morlock and named co-plaintiff Randal Kuczor don’t buy it. They say it happens all across the country.
“Upon information and belief, Whole Foods grossly understated and misrepresented the number of stores involved,” the complaint states. “It is believed that this is a nationwide practice, as evidenced in part by a lawsuit brought by nine store managers against Whole Foods for blowing the whistle on the alleged nationwide practice of wage theft by Whole Foods.”
Kuczor says the class could include “at least” 20,000 Whole Foods employees who were not paid bonuses owed them. He seeks class certification, certification of a subclass of District of Columbia employees, and $200 million in punitive damages, or 10 percent of the net value of the company, whichever is higher.
The five-count, 15-page lawsuit, includes claims of breach of contract, unjust enrichment, two counts of failure to pay wages, and failure to maintain accurate employment records.
Kuczor is represented by Salvatore Zambri, with the Regan Zambri and Long.
Whole Foods did not respond to a request for comment.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.