Wawa settles ESOP lawsuit for $21.6 million

Wawa is paying $21.6 million to settle a 2018 class-action lawsuit involving the company’s employee stock option plan, according to a court filing Thursday.

The convenience store chain, which has a cult following on the East Coast, allegedly forced former employees out of the ESOP in 2014 and 2015. In doing so, the company allegedly breached its fiduciary duty, in part because former employees received less than fair market value for their stock holdings, according to the lawsuit.

The case is separate from a similar lawsuit filed in 2016 against Wawa, which ended in a $25 million settlement. The newer case involves a different class of plaintiffs who separated from the firm between 2011 and 2015, according to court records.

The new $21.6 million settlement will compensate about 10,000 former employees by about $500 per share of Wawa stock they owned, the proposed order read. The company’s plan purchased nearly 44,000 shares from former employees included in the class.

The settlement, which requires court approval, resolves claims that the company improperly limited the rights of former employees to stay invested in the stock plan until they reached age 68 and that it undervalued the stock it purchased from those accounts when it forced people out of the plan.

The plaintiffs reached a settlement in principle with Wawa as early as December, though the specific terms were not disclosed publicly until Thursday.

Wawa did not immediately respond to a request for comment about the settlement.