Hundreds of Local 5 members working at Rite Aid Drug Stores will receive backpay checks from Rite Aid thanks to an arbitrator’s ruling in August that the company improperly calculated retroactive pay increases due under the terms of a new contract that was ratified in 2020.

The 2020-2022 Agreement, which was recommended by the union bargaining committee and approved by the members, included a seventy-five cent per hour pay increase retroactive to January 2020 for most employees.

Rite Aid management ultimately provided a five-cent increase to many Local 5 members who were expecting the larger increase, contending that there was a contractual agreement to offset the pay hike by the recent seventy cent increase in the California minimum wage.

Local 5 quickly filed a grievance and moved the case to arbitration. While the company argued that its intent was to offset the increase and contended that the settlement agreement backed up its position, the arbitrator ruled that the language drafted by the company is “ambiguous” and that Rite Aid did not offer any evidence that there was explicit, communicated intent to offset the contractual wage increase with the increase in the minimum wage.

Local 5 President John Nunes applauded the ruling and praised the Union’s legal team.

“Thanks to the professional work of our grievance department and our legal staff, our hard-working members at Rite Aid will receive the wage increase that they were expecting and that they clearly deserve,” Nunes said. “Our efforts will now focus on assuring that the company calculates and makes the required payments in a timely manner.”