A settlement agreement has been finalized between West Marin Pharmacy and three former employees, who were awarded over $46,000 after filing small claims lawsuits with the state’s Labor Commissioner in 2013.
The looming payment obligations, the result of the pharmacy’s alleged failure to adequately provide mandatory 10-minute breaks, have hung over pharmacy owner Zsuzsanna Biran like a storm cloud, threatening a “brick-and-mortar” Point Reyes Station business already saddled with rising prescription costs and shrinking reimbursements from insurance providers, she said.
“It certainly places a financial burden,” said Ms. Biran, who has owned the pharmacy with her husband, Jason Yoon, since 2007. “And emotional, spiritual. It’s a heartbreak.”
As recently as late March, Ms. Biran entertained a phone call from a CVS Pharmacy representative who inquired about the business, which has long been West Marin’s only pharmacy. Though she did tell the rep that the pharmacy now carries a lien due the Labor Commissioner’s ruling—a detail that larger pharmaceutical companies like CVS could use as leverage to persuade her to sell in return for relief from the lien—Ms. Biran stopped short of revealing the pharmacy’s real value. She has not heard from the rep since.
“I don’t want to sell to CVS,” Ms. Biran said on Tuesday in the pharmacy’s back office. “And I don’t want to sell with the lien.”
Rather, Ms. Biran has wondered recently whether a shift toward more of a community-owned, non-profit business model might address the pharmacy’s losses. Additionally, she and the pharmacy’s manager, Rachel Delffs, have been brainstorming new services to diversify and enhance the store’s offerings, such as travel medications and more emphasis on over-the-counter retail goods. But the burden of paying her old employees, combined with an ongoing five-percent reduction in reimbursements from patients with Medi-Cal, make it all but impossible for the pharmacy to do much more than break even.
“We’re running on empty,” said Ms. Delffs. “We’re living from paycheck-to-paycheck. And we’re hoping, when all of these extra expenses are gone, that we can feel a greater sense of satisfaction from having created a profitable business that supports the longevity of the community.”
Reached last week, the settlement replaces a previous deal rescinded in March by the employees’ lawyer, Daniel Remer, who declined to comment other than to confirm that the parties had finally settled.
Nearly a year after concluding a three-hour hearing in March 2014, Deputy Labor Commissioner Molly Hillis ruled in late January that the pharmacy must pay rest-period premium wages and waiting-time penalties to Rocio Rodriguez, Marisol Gonzalez and Dulce Alvarado, all of whom quit the pharmacy between April and June of 2013. Ms. Hillis brushed aside a second claim that the employees were also owed overtime wages, stemming from accusations that a minute-rounding timesheet system overseen by Ms. Delffs had short-changed the amount of hours worked.
According to state labor rules, employers must ensure that employees take at least one 10-minute break during each four-hour shift. Ms. Hillis, in her judgment, found that the pharmacy’s management did not go far enough to guarantee that breaks could be had, particularly during times when the flow of business was heavy and employees needed someone else to cover the register or fill prescriptions before going on break.
Often, the employees claimed, breaks consisted of running business errands to the post office or the bank, as well as pastry runs to the Bovine Bakery. In general, they said, the pharmacy’s break policy was unclear from the start and never explained by either Ms. Biran or Ms. Delffs.
“We didn’t really have a break policy,” Ms. Rodriguez, a technician, testified during the hearing. “I don’t really recall taking many breaks.”
Yet Ms. Biran, in her testimony, stressed on multiple occasions that her employees had ample opportunity to break. Their confusion, she said, may have arisen from the laid-back, familial atmosphere of the pharmacy, which gave them freedom to rest during slow periods and to socialize with family and friends.
“There were no days when they did not take breaks,” Ms. Biran said. “No matter how busy it was, they would take breaks.”
Other employees also offered testimony on the break policy, in defense of both the three employees and the pharmacy’s management. Eva Ávalos, a 22-year employee, testified that no one was ever directly told to take a break—but everyone understood that break time was available if needed, so long as a shift was covered.
“We were able to manage our own time whenever we needed to,” Ms. Ávalos said. “We help each other.”
But Karen Barnal, who worked at the pharmacy from September 2012 to December 2013, stated in a letter that the pharmacy had no set, scheduled break system, corroborating testimony that breaks were frequently taken in the form of on-the-clock errands.
“This was a welcome ‘break’,” the letter read, “but it was not really a break because it was running errands for the Pharmacy. These were not personal errands and these breaks were usually at the end of the day.”
Ms. Hillis, the commissioner, ruled in favor of the employees. Now, the pharmacy keeps an employee handbook that details California labor rights, and Ms. Biran hopes that other small businesses in West Marin will not have to face the same trials.
“I’ve worked in a lot of places, and this has never happened to me,” said Ms. Biran, who managed a Rite Aid as well as multiple other pharmacies after arriving in California in 1980. “I’m hoping it’s something unusual. But in California, this is an epidemic.”