Wal-Mart ordered to pay damages

Jury awards retailer's workers $172 million for loss of lunch breaks

December 23, 2005|By MOLLY SELVIN AND ABIGAIL GOLDMAN | MOLLY SELVIN AND ABIGAIL GOLDMAN,LOS ANGELES TIMES

A jury in Oakland, Calif., awarded $172 million yesterday to 116,000 current and former employees of Wal-Mart Stores Inc., in the first of dozens of wage-and-hour class action lawsuits targeting the chain to go to trial.

The world's largest retailer was ordered to pay $57 million in general damages and $115 million in punitive damages to employees for violating a 2001 state law that requires employers to provide 30-minute unpaid lunch breaks to employees who work at least six hours in a shift.

California law requires companies to pay workers a full hour's wages for every missed lunch. Lawyers for Wal-Mart had argued that workers did not demand their penalty wages on a timely basis.

But jurors in Alameda County Superior Court decided otherwise, handing a big win to the group of employees who had worked in Wal-Mart's California stores from Jan. 1, 2001, through May 6 this year.

A jubilant Michael Christian, one of the San Francisco lawyers who represented the plaintiffs, said the verdict made for "a good day."

"There was an abundance of evidence that Wal-Mart knew that workers did not get meal periods for many years and they did nothing," he said. "The jury concluded that conduct was unacceptable ... and deserved to be punished for its willful indifference to its workers."

Wal-Mart said it disagreed with the verdict and would appeal. The company also said that because the case involved a meal-period statute that was unique to California, the verdict had no bearing on any other state.

But many legal experts said that with similar litigation pending in about 40 other states, the verdict was certain to have a ripple effect far beyond California.

Toby Marshall, a Seattle lawyer who represents workers in a similar class action against Wal-Mart in Washington, said the verdict would strengthen other claims.

"This is a very clear public statement that its policies are against the law," Marshall said of Wal-Mart. "While each state's law is different, the fact that one jury found that Wal-Mart's corporate policies are resulting in wage-and-hour violations means that it's more likely that a jury here in Washington or elsewhere is going to find violations."

Wal-Mart has acknowledged that it had "compliance issues" when the statute took effect in 2001, spokeswoman Mona Williams said.

"Wal-Mart has since taken steps to ensure all associates receive their meal periods, including adopting new technology that sends alerts to cashiers when it is time for their meal breaks," she said. "The system will automatically shut down registers if the cashier does not respond."

Last year, Wal-Mart settled a similar lawsuit by workers in its Colorado stores for $50 million, and an Oregon jury awarded 83 Wal-Mart workers in that state about $2,000 each for lunch-period violations.

The California verdict, if upheld, would amount to nearly $1,500 for each affected employee, but individual awards probably would vary because of length of service. Wal-Mart also will likely have to pay the plaintiffs' legal fees, as awarded by the court.

In addition to the similar wage-and-hour class action suits in other states, Wal-Mart faces lawsuits charging it with gender discrimination and tolerating sweatshop conditions in the factories of its foreign suppliers.

Molly Selvin and Abigail Goldman write for the Los Angeles Times.

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