In Wawa’s latest settlement with aggrieved former workers, the firm has agreed to pay $21.6 million to as many as 10,000 retirees and their lawyers to settle a complaint that the chain unfairly forced them to sell shares they had been promised as retirement savings.
The proposed settlement, reached earlier this month in the case of Cunningham v. Wawa, follows a similar pact in 2018 in which Wawa agreed to pay $25 million to a different group of more than 1,200 former managers and other senior Wawa employees.
Those earlier ex-Wawa employees, in a case called Pfeifer v. Wawa, said they, too, were forced to sell their private Wawa stock when the company, amending the plan in 2014 and 2015, canceled a promise they could keep it until retirement, allegedly violating federal law.
In sum, Wawa has now agreed to pay almost $50 million to resolve complaints from former employees that it forced them to sell their lucrative stock in a maneuver designed to make sure the founding Wood family kept control of the firm. The stock has tripled in value since and the lawsuits say the tactic costs the workers a fortune.
According to the Cunningham lawsuit, the departed workers were told that Wawa needed their shares for new workers, even though they had more than enough shares set aside for that purpose.
According to the suit, Wawa leaders forced them to sell their stock in Wawa Employee Stock Ownership Plan (ESOP) after a law passed under President Barrack Obama made it easier for Wawa to convert from a typical C-corporation into a family-business-style S-corporation. This ended its federal income tax obligation and made the company more profitable.
