A state judge in Minnesota has ruled that Wal-Mart Stores, the discount department store chain, violated state laws on rest breaks and other wage matters more than 2 million times and as a result could face more than $2 billion in fines. The judge has threatened to impose a $1,000 penalty for each violation.
The judge also ruled Monday that Wal-Mart owed $6.5 million to 56,000 current and former employees because of contractual violations, including a failure to give workers promised rest breaks at least 1.5 million times. The judge found that Wal-Mart managers in Minnesota had systematically broken the law by having employees take in-house training while off the clock.
"It's been a long time coming," said William Sieben, a lawyer for the plaintiffs, who filed the lawsuit nearly seven years ago. "It's only through a decision like this that Wal-Mart can be held to its contractual agreements and to complying with Minnesota law."
The judge, Robert R. King Jr. of the 1st Judicial District in Dakota County, ruled for Wal-Mart on several important issues, finding that Wal-Mart managers did not systematically make cashiers and stockers work off the clock while doing their regular jobs.
A Wal-Mart spokeswoman, Daphne Moore, said the company was considering an appeal. "We do respectfully disagree with portions of the decision," Moore said, adding that Wal-Mart was pleased that the court ruled in its favor on many points.
"Our policies are to pay every associate for every hour worked and make rest and meal breaks available for our associates," said Moore, whose company uses the term associates for its employees.
Four women filed the lawsuit in September 2001, asserting that Wal-Mart managers often denied them meal breaks and rest breaks, as called for in the employee handbook, and often made employees work off the clock.
In his 151-page ruling, King set Oct. 20 as the date for the second phase of the trial to allow a jury to determine punitive damages and the amount of statutory penalties.
The Minnesota case is one of more than 70 lawsuits filed across the country in which workers have accused Wal-Mart of making them work off the clock or miss required breaks. In the Minnesota case, Judge King found that Wal-Mart stores had violated state law by failing to keep records for 325,188 shifts or 13 percent of shifts. He also found that on 69,710 occasions, Wal-Mart stores in the state had failed to make appropriate time records for class members who were working off the clock doing in-store computer-based training.
King repeatedly noted that Wal-Mart's audits had found that its workers were missing meal and rest breaks tens of thousands of times.
Wal-Mart asserted that it could not rely on the audits, but the judge faulted company management for taking no action in response to the audits.
"They put their heads in the sand," he wrote.
In what some workers said were the most serious violations, King found that Wal-Mart owed $3.6 million for failing to provide the 56,000 members in the class action suit with rest breaks to which they were contractually entitled. He also said the company owed $1.6 million for 4.4 million contractual violations of shorting workers - giving workers less than the amount of time they were entitled to - on their 15-minute rest breaks.
Wal-Mart faces the greatest liability over having violated Minnesota law by deducting several minutes from workers' pay when they took rest breaks for 16, 17 or 18 minutes, when Wal-Mart said they were entitled to 15-minute breaks. Under Minnesota law, employers are barred from deducting minutes from a worker's pay so long as the break was less than 20 minutes.
King found that Wal-Mart had committed that statutory violation 1.558 million times; the company is subject to a civil penalty of up to $1,000 for each of those violations.
King also concluded that Wal-Mart broke state law by failing to give 73,864 meal breaks. Each of those violations could also mean a $1,000 fine.