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In a settlement signaling the end of a high-stakes federal labor dispute, snack giant Kellanova and cereal-maker WK Kellogg Co. will pay nearly $1.5 million to resolve claims they failed to properly compensate thousands of hourly workers for overtime and off-the-clock duties—including COVID-19 temperature screenings, preshift meetings, and gear changes.

U.S. District Judge Robert J. Jonker gave final approval Tuesday to the deal, calling the outcome “fair and reasonable” in a case rooted in allegations of Fair Labor Standards Act (FLSA) violations.

From Breakfast Bowls to Court Battles

The lawsuit, launched in January 2024 by former employees Damaso Maldonado, Daniel Shepherd, and Donnell Coby, argued that Kellanova and WK Kellogg improperly excluded shift differentials when calculating overtime. The plaintiffs later expanded the case to include unpaid “off-the-clock” work during the pandemic and beyond.

The companies will now pay $1.475 million to settle the claims. The settlement includes roughly 11,000 current and former hourly workers employed across U.S. facilities (excluding California) between January 30, 2021, and January 27, 2025. Eligible workers can opt in by simply cashing a check.

Legal Grains of Truth

While the companies denied wrongdoing, both sides acknowledged the risks and costs of prolonged litigation, including potential roadblocks from collective bargaining agreements and the difficulty of proving exact times spent on preshift duties.

“If forced to litigate this case further, the parties would certainly engage in complex, costly, and protracted wrangling,” the motion said.

Judge Jonker retained some skepticism about the fee structure—approving $491,666.66 in attorneys' fees, or one-third of the total fund—but critiqued the reliance on the percentage-of-the-fund method. He argued that the lodestar method, which focuses on hourly rates, was better suited to FLSA cases where recoveries are relatively modest. Still, he approved the fee, noting that both calculations aligned closely in this case.

Corporate Shake-Up Looms

The ruling comes on the heels of a massive corporate move: Ferrero’s $3.1 billion agreement to take WK Kellogg private, announced earlier this month. Though unrelated to the lawsuit, the timing adds intrigue to the company’s evolving public image and labor practices.

WK Kellogg was spun off from Kellogg Co. in 2023 as its North American cereal division, while Kellanova took over the global snack portfolio.

Attorneys in the Case

For the employees: