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O’Reilly Auto Settlement Over California Wage Lawsuit

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Preliminary approval of proposed $4.1 million to settle four consolidated cases alleging California labor law violations

San Diego, CAO’Reilly Auto Enterprises LLC‘s workers have preliminary approval of a proposed $4.1 million to settle four consolidated cases alleging California labor law violations. The main lawsuit, filed in June 2021, said the retailer should have paid workers at its 28 U.S. distribution centers for time they spent each day in COVID-19 screenings before shifts and for work performed during meal breaks.

Jeffrey Pipich filed the main lawsuit in San Diego federal court under the Fair Labor Standards Act (FLSA) and later became an action under California’s Private Attorneys General Act (PAGA). The other three lawsuits alleged O’Reilly’s failure to provide proper breaks, improper payment of wages and proper wage statements, and unfair competition. The cases were consolidated on May 21, 2024.

Risks Involved

In late May, Law360 reported that O’Reilly workers were in favor of settling the case because they face "substantial risks" in moving for class certification, even though the deal represents approximately 28% of the total recovery class members could have received at trial. According to their memorandum supporting the motion to approve a settlement, "There is a risk that plaintiffs' recovery for unpaid wages would be extremely limited at best, largely because defendants' written policies throughout the relevant time period prohibited off-the-clock work…Off-the-clock claims are difficult where a defendant requires in its written policies that all work must take place while clocked in."

According to the lawsuit, O’Reilly administered illegal policies requiring its non-exempt workers to undergo COVID-19 screenings and security inspections each day without pay. These pre-shift off-the-clock COVID-19 screenings and pre- and post- shift security checks constitute compensable time that was worked by Plaintiff and Collective Members.

O’Reilly Lawsuit Timeline

June 2021: Reuters reported that distribution center employees were required to have their temperatures taken and answer a series of questions before they proceeded to a security check. Workers also went through a security screening after clocking out at the end of their shifts. Pipich, who worked as a driver for O'Reilly from 2015 to 2021, said that he and other workers spent up to 20 minutes per shift in screenings but were not paid the minimum wage or overtime for that time, which violates the Fair Labor Standards Act.

July 2021: O'Reilly asked a California federal judge to dismiss Pipich’s lawsuit claiming ts employees should be paid for time spent undergoing security and COVID-19 screenings. The retailer argued that time isn't compensable because it's not integral to their work and the amount is too brief to be consequential.

March 2022: An earlier version of the lawsuit that had included Fair Labor Standards Act claims was dismissed. A federal judge ruled that security screenings were not compensable under the FLSA because they were not integral to the "principal activities" of warehouse workers. The U.S. Department of Labor determined that preshift COVID-19 health screenings are compensable for workers whose job activities are directly related to patient care services, such as nurses, but O'Reilly hired workers to load and transport products, so they weren't owed pay for the screening time.

April 2022: An O’Reilly employee filed a complaint bringing representative PAGA claims.

December 2023: Two other plaintiffs were added to the PAGA complaint, along with claims for failure to provide meal periods or pay for missed meal periods.

The case is Pipich v. O'Reilly Auto Enterprises LLC, case number 3:21-cv-01120, in the U.S. District Court for the Southern District of California.

O’Reilly Automotive is a leading retailer of auto parts and services. It employs thousands of individuals at distribution centers throughout the state of California and the U.S., to support the flow of its automobile products into stores nationwide. According to, its revenue grew 5% in 2023 to $3.83 billion.


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