A California federal judge on Monday refused to approve a $1.15 million settlement that would have resolved a wage and hour lawsuit against Lane Bryant, ruling that the deal fails to hold the company accountable and undervalues the claims brought under California’s Private Attorneys General Act (PAGA).

The decision by U.S. District Judge P. Casey Pitts puts a halt to an agreement between Lane Bryant and former stylist Shania Cole, who accused the plus-size fashion retailer of violating California labor laws by failing to pay employees all wages owed.

Settlement Falls Short of Legal Requirements

Under California law, employers resolving PAGA claims must pay $200 per affected employee per pay period for each violation. However, the settlement failed to include this heightened penalty, instead allocating just $60,000 to the PAGA claim—an amount Judge Pitts deemed insufficient.

Had the full penalty been applied, the potential value of the PAGA claim would have been significantly higher. Instead, the proposed settlement represents less than 1% of its total value—a figure that courts typically do not approve without compelling justification.

Workers Claim They Were Unpaid for Security Checks and Missed Breaks

Cole, who worked as a nonexempt stylist at a Lane Bryant store in California from June 2021 to June 2022, alleged that the retailer required employees to undergo security checks off the clock, depriving them of rightfully earned wages.

She also claimed that Lane Bryant’s understaffing policies resulted in employees missing uninterrupted 30-minute meal breaks, as there was often no one available to relieve them from their duties.

These practices, Cole argued, caused employees to work uncompensated time, pushing their effective wages below the state’s minimum wage requirements.

Settlement Rejected Amid Broader Scrutiny

The proposed settlement, which the parties submitted for approval in October, aimed to compensate approximately 1,435 workers, offering an average payout of about $470 per person.

But with the California Labor and Workforce Development Agency (LWDA) remaining silent on the deal, Judge Pitts found that the parties failed to justify why such a low-value settlement should be approved.

The judge suggested that settlements falling below 1% of a PAGA claim’s potential value are only approved in special circumstances, such as when non-monetary relief is included—something this agreement lacked.

What’s Next for Lane Bryant?

With the deal now rejected, Lane Bryant faces continued legal battles over its alleged wage and hour violations. The case, which was removed to federal court in 2022, remains unresolved, and the retailer may have to negotiate a new, more substantial settlement or fight the claims in court.

Representatives for both Lane Bryant and Cole did not immediately respond to requests for comment.

Legal Representation

• Cole is represented by: Raul Perez, Bevin Allen Pike, Daniel Jonathan, and Trisha K. Monesi of Capstone Law APC.
• Lane Bryant is represented by: David J. Rashe, Thomas A. Duda, and Carrie Anne Gonell of Morgan Lewis & Bockius LLP.