Wal-Mart is ordered to pay for labor law violations
MINNEAPOLIS -- A judge has ruled against Wal-Mart in a class-action lawsuit, saying the discount retailer violated state labor laws 2 million times by cutting worker break time and "willfully" allowing employees to work off the clock.
Dakota County Judge Robert King Jr. on Monday ordered Wal-Mart to pay $6.5 million in compensatory damages, but Wal-Mart could end up paying more than $2 billion after a jury in October considers civil penalties and punitive damages.
"We believe that this award not only helps the individual clients, but it also sends a message to Wal-Mart that it has to pay for its mistakes," said Justin Perl, an attorney representing the former Wal-Mart employees named as plaintiffs in the lawsuit.
Wal-Mart spokeswoman Daphne Moore said Tuesday that the Bentonville, Ark.-based company disagrees with portions of the judge's decision and is considering an appeal.
"Our policy is to pay every associate for every hour worked and to make rest or meal breaks available to every employee," Moore said, adding that many Wal-Mart employees who testified during the trial said they were getting breaks and being paid properly.
"That said, we're always going to take seriously any sort of allegations of our policy not being followed," she said.
Shares in Wal-Mart rose 48 cents to $56.68 in afternoon trading.
The class-action part of the lawsuit represented 56,000 Wal-Mart and Sam's Club employees in Minnesota and covered a period from September 1998 through January 2004.
The ruling, which was given to the parties Monday evening, comes after judgments against Wal-Mart in Pennsylvania and California found similar violations.
In Pennsylvania, workers won a $78.5 million judgment in 2006 for working off the clock and through rest breaks. A $172 million verdict against Wal-Mart in 2005 found the company illegally denied lunch breaks in California. Wal-Mart is appealing those rulings.
Wal-Mart has also settled a Colorado suit over unpaid wages for $50 million.
Perl said the former employees involved in the Minnesota case were able to show that Wal-Mart violated their rights.
"It's been a long and tough road for them," Perl said of his clients. "These are individuals working hard to make a living at roughly less than $10 an hour, and many of them testified and many records established that they were missing breaks, missing meals and working off the clock."
Moore pointed out that the 3½-month trial also revealed that some Wal-Mart employees had missed breaks or meals voluntarily. "We don't believe the employer is at fault when that's the case," she said.
But the judge ruled otherwise, finding that Wal-Mart violated its contract nearly 70,000 times by failing to pay employees for off-the-clock work.
The judge said Wal-Mart should have known the employees were working off the clock while at computer-based training terminals and "willfully allowed" it to continue.
The company also failed to provide employees with rest breaks more than 1.5 million times and shortened employees' breaks more than 44,000 times, according to the order.
Wal-Mart was also found in violation of statutes relating to making and keeping employee time records and failing to let employees have any time for a meal break. While the plaintiffs won't receive compensatory damages for those violations, Wal-Mart is subject to a $1,000 civil penalty for each incident.