The retail giant has faced growing scrutiny over its labor practices, particularly in its distribution centers. The class action, filed in late 2022, centered around whether hourly workers in New Jersey were paid for all the time they were required to be on-site, even if not on the clock yet.
This lawsuit touches on a broader debate in the retail sector: how far employers must go to ensure hourly workers are fairly compensated for every part of their shift. It also comes amid rising pressure on large corporations to tighten compliance with wage and labor laws across the country.
Settlement Covers Years of Unpaid Pre- And Post-shift Time
The lawsuit was filed by Krystal Sadler in November 2022. It alleged that Target failed to pay nonexempt employees at its New Jersey distribution centers for time spent on-site before and after shifts. These periods included walking to and from time clocks and undergoing mandatory security screenings. According to reporting from Newsweek, this affected thousands of employees working at sites in Burlington, Perth Amboy, and Logan Township.
The settlement applies to current and former workers employed at those three distribution centers from August 6, 2019 onward. A total of 13,000 workers are expected to be eligible, according to Sourcing Journal. The total value of the settlement is $4.6 million, with about $2.75 million set aside for direct payments to the class members.
Payouts will be calculated on a pro rata basis using Target’s own payroll data. No action is required on the part of recipients who wish to receive payment, they will receive their checks automatically, unless they choose to opt out of the settlement by February 13. According to Pix 11, the payments will be subject to normal tax reporting requirements, with eligible workers receiving either W-2 or 1099 tax forms depending on how their share is categorized.
Target has not admitted wrongdoing and continues to deny all claims made in the lawsuit. The company has agreed to the settlement to avoid the cost and length of prolonged litigation.
Legal Argument Focused on Time Tracking and Technology
At the heart of the case was the argument that Target had both the ability and the obligation to compensate workers for all time spent on-site, not just the minutes they were actively clocked in. In a filing quoted by Newsweek, plaintiffs argued, “In this day and age, there is no technological barrier to paying plaintiffs and other employees for such time.”
The lawsuit stated that Target already records when workers enter and, in some cases, leave its facilities. That data, plaintiffs claimed, could have been used to calculate additional minutes worked outside of official clock-in times.
The legal team also pointed to the mandatory security screening procedures and the design of the facilities, which required staff to walk considerable distances before reaching their designated time clocks.
The final hearing for court approval of the settlement is scheduled for February 24. If approved, payments are expected to be issued shortly after that date. According to Sourcing Journal, about $1.53 million of the settlement is allocated for attorneys’ fees, while $10,000 will go to lead plaintiff Krystal Sadler in recognition of her role in initiating the legal action.
This settlement may set a precedent for how major retailers manage compensation for non-clocked activities, especially in large facilities where movement and security routines can account for several minutes each day.
