Settlement Agreeme nt

This Sett le ment Agreement and Release (the "Agreement" ), relating lo claims under San
Francisco's Public Health Emergency Lea ve Ordinance (''P HELO"), is between Employer (the
term "Employer" includes the following entities: Walgreen Co. and Walgreen Pharmacy
Services Midwest, LLC and its and their parent or subsidiary companies) , and the City and
County of San Francisco (the "City"), by and through its constituent agency, the Office of Labor
Standards Enforcement (the "OLSE") (collecti vely, the "Parties" ). The City enacted and the
PHELO became effective on or about April 17, 2020. The City has authorized subsequent
extensions of PHELO.

Findings and Stipulated Facts

The OLSE is a co nst ituent agency of the City, in charge of enforcing the PHELO .

The OLSE received complaints from employees of Employer alleging that Employer
failed to comply with the PHELO. The OLSE notified Employer that employees had complained
to the OLSE that Employer's third party FMLA/Leaves of Absence administrator, Sedgwick, was
providing Employer's employees with inaccurate and misleading information related to their
eligibility for and rights under the PHELO. The OLSE also explained that it believed that
Sedgwick's actions were having a chilling effect on Employer's employees' PHEL utilization.

The OLSE opened an investigation and audit (the "A udit'' ) of Employer' s compliance
with the PHELO, OLSE Case No. PHELO-101. The OLSE's Audit Period is from April 17,
2020, through June 12, 2020. Employer and the OLSE were in regular contact during the Audit,
and Emplo ye r provided the OLSE with information regarding its employee's use of PHEL during
the Audit Pe riod.

Walgreens denies any liability or wrongdoing. However, the Parties desire to avoid the
expense, burden, and delay of further administrative proceedings and potential litigation, and to
resolve the Parties' entire dispute over the PHELO claims during the Audit Period for the
Affected Employees listed in Exhibit A.
 THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1. In exchange for the promises by the Pa rties, and without admission of any
violation, Employer agrees lo pay the total amount of Nine Hundred Eight Thousand Five
Hundred N ine ty-Seven Dollars and Ninety-Three Cents ($908,597.93) ("Settlemenl Amount" ) in
penalties to employees liste d in Exh ibi t A (the "Affected Emplo yees"). Employer will make such
payment on or before Monday, May 31, 2021, and will make payment to each Affected Employee
in accor da nce with Exhibit A, without deductions. Employer also will and already has provided
employees listed in Exhibit A with l week of PHELO hours for their use pursuant to the PHELO.

2. Emplo yer also will pay for the cost of OLSE' s inves tigation in the amount of Four
Thousand Four Hundred Seventy-Six Dolla rs and Thirty Cents ($4,476.30), which will satisfy all
claims that the City may have against Employer for the City' s costs of inves tigation. Employer
will make such check payable to: City and Co untyof San Francis co. Employer will mail the
check to the attention of Linshao Chin, Compliance Office r, Offic e o f La bor Standards
Enforce ment, 1 Dr. Carlton B. Goodlett Pla ce, Room 430 , San Francisco, CA 94102.

3. 180 days after the ea rlier of May 31, 2021, a nd the date Employer issues the last
installme nt of chec ks, Employer sha ll provide the OLSE with the following: (a) an accounting,
with suppo rting evidence, of proof of payme nt to Affected Employees, depending on the fonn of
payment made, whic h may include ca nce led checks that current and fonner employees cashed or
proof of direct deposit to bank account or pay card; (b) a list of the uncashed checks; and (c) a
check made payable to 'T he City and County of San Francisco" in the gross amount of the
uncashe d checks. OLSE shall hold the funds in escrow for the applica ble e mployees . Employer
shall send the acco un ting evidence and the list of uncashed checks to [email protected] by
email; and the chec k made payable to the City to Lins hao Chin, Compliance Of ficer, Office of
Labor Standards Enforcement, at the address listed above.

4. The OLSE shall notify Employer in writing if the OLSE believes that Employer
has defaulted and/or is in breach of any of the terms of this Agreement and will provide Employer
with 30 days to cure such breach. If Employer does not cure such breach, the OLSE reserves the
right to pursue all rights available under the PHELO including and without limitation, all back
wages, interest, and administrative penalties on behalf of the City and the employees.
 5. The OLSE will hold any administrative action in abeyance until Employer makes
payme nts pursuant to this Agreement. Upon Employer fulfilling its obligations under Para graph3
of this agreement, the OLSE will close Case No. PHEL0-101 on behalf of the City, itself and
workers listed in Exhibit A. The payments made by Employer pursuant to this Agreement will
satisfy all claims under the PHELO for all workers liste d in Exhibit A for the period of April 17,
2020, through June 12, 2020.

6. If Employer fails to make the payments as agreed above, the outstanding amount
owed will become immediately due and payable . In addition, a coUections fee will be added to the
outstanding a mount and the OLSE may refe r the case to the Bureau of Delinquent Revenue and
Investigations for further collection measur es and enforcement, including, but not limited to legal
action and post-judgment collection, and the City may pursue all available remedies under the
Ordinance including, but not limited to:

a. Payment of all unpaid wages and penalties;

b. Administrative penalties in the amount of $50 to each employee or person

c. Injunctive re lief ;

d. Administrative penalties in the amount of $50 to the City for each employee
or person whose rights under this Chapter were violated for each day or
portion thereof that the violation occurred or continued;

e. Attorneys' fees and costs

7. If Employer is sold, ftles for bankruptcy or ceases to operate, all amounts owed
pursuant to this agreement pursuant to this agreement will become immediately due and payable.

8. The OLSE agrees to accept the Settlement Amount from Employer as set forth in
this Agreement as the full and final amount owed by Employer to the Affected Employees in
Exhibit A, and to the City for the potential PHELO claims of the Affected Employees during the
Audit Pe riod. Nothing in this Agreement shall limit or affect the OLSE' s right to take or pursue
any other legal claim(s) to enforce City ordinances other than PHELO, nor shall it limit or alter
the obligations of Employer to comply with the PHELO currently or in the future. If the OLSE
 receives a s ubstantiated PHELO compla int that arose for the Audit Period for an Employee not
lis ted in Exhibit A, it will provide Employer with sixty (60) days to pay any owed PHEL penalties
to tl1e employee wit110ut assessing penalties to the City & County of San Francisco. Nothing in
this Agreement shall in any way liniit or alter the OLSE' s authority to monitor Employer's
compliance with the P HELO , and to take all appropriate actions against Employer for any alleged
failures to comply with the PHELO following the Audit P eriod, including , but not limited to,
assessing authorized damages and penalties, seeking compensation for employees, and recovering
attorney' s fees and costs.

9. In consideration for the promises set fortl1 in this Agreement, the City agrees to
release Employer, its past and present shareho lders, former e mployees , of ficers, directors , from
any and all of the clainis of the Affec ted Employees that were or could have been asserted before
an administrative body or in court, including a ll claims, costs, and attorneys' fees relat e d in
whole or in part, to violations of the PHE LO.

10. Nothing in this Agreement shall preclude any Party from taking any steps,
including filing a civil ac tion, to enforce tlle temis of this Agreement.

11. The Parties agree to bear their own costs with respect to the preparation of iliis
Agreement only, but in the event of a breach of this Agreement the prevailing Party may recover
its full attorney's fees and costs to enforce this Agreement.

12. This Agreement is made and entered into witllin and shall be governed by,
construed, in terpreted, and enforced in accordance with the laws of California without regard to
the principles of conflicts of laws. The parties agree that the San Francisco Superior Court shall
have jurisdiction to interpret and enfo rce this Agreement. All disputes arising out of this
Agreement shall be resolved by the San Francisco Superior Court.

13. The Parties to this Agreement ac know ledge that they have fully read the contents
of this Agreement, that they have been hereby advised of their rights to consult counsel of their

choice regarding the meaning and effect of this Agreement, that they have full, complete , and
total comprehension of the provisions contained in this Agreement, and are in full agreement with
each and every one of the temis, conditions, and provisions. Employer also hereby acknowledges
that by entering into this Agreement, Employer waives any right it had or may have acquired to an
administrative hearing on the PHELO clainis during the Audit Pe riod.
 eacn waive any common law and statutory rule of construcfion tha t am tguity should be
construed against the draft.er of this Agreement, and the Parties agree that the language in all parts
of this Agreement shall be co nstrued as a whole, according to fair mea ning.

15. This Agreement will be enforceable and binding on tJ1e P arties, the heirs, personal
representatives, successors, and assigns of the Parties and inure to the benefit of the Parties and
their heirs, successors, and assigns.

16. If any provision of the Agree men t is found to be unenforceable, then the remaining
provisions shall remain valid and enforceable.

17 . Each of the Pa rties to this Agreement represe nts and warrants that it has the right
and authority to exec ute this Agreement.

18. This Agreement may be signed in counterparts, each of which shall constiMe an
o riginal document, and all of which shall constiMe one single instrument A duplicate signature sha
ll have the sa me force and effect as an original signature.

19. The Parties acknowledge that this Agreement constitutes the sole settlement
agree ment for PHELO claims during the Audit Pe riod, iliat it supersedes any prior oral or written
agreements, and that it may be modified only by a writing signed by the Pa rties.

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 14. This Agreement has been reviewed by the Parties and their respect ive attorneys
and each have had a full opportunity to negotiate the contents of this Agreement. The Parties
 20. The effective date of this Agreement is the date the Agreement is signed by all
Pa rties if on the same day or if on different dates then the last day signed by a Party, including
counsel for a Party.

JT JS S O AGREED.

Executed in San Francisco, California.

CITY AND COUNTY OF SAN FRANCISCO

By t f;JcL--------
J hua Pastreich
DATE: ] /4J.,J_/4_/_
r7
Office of Labor Standards Enforcement

Executed in (ity), (state).

Walgreen Co.
Walgreen Pharmacy Services Midwest, LLC

3/26/2021
By: _ DATE: _
Hillary Leiste n
Senior Vice President and Chief Human Resources Officer

.
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