Wal-Mart, the world’s largest retailer, violated the law more than 2 million times over a six-year period by denying workers time for breaks and forcing them to work “off the clock” for no pay, a Minnesota judge has ruled.
Dakota County District Judge Robert King ordered the company to pay $6.5 million in back pay. In addition, Wal-Mart faces fines as high as $2 billion for the wage-and-hour violations.
King’s ruling culminated a seven-year legal battle by four former Wal-Mart workers who filed a class-action lawsuit on behalf of 56,000 current and former employees who worked at Minnesota Wal-Mart and Sam’s Club stores between Sept. 11, 1998, and Jan. 31, 2004.
“I was treated like so many of my co-workers,” said Nancy Braun of Rochester, Minn., one of the four plaintiffs. “There was just too much work to do and never enough time to do it. There just wasn’t enough time in the day to take the breaks we were entitled to.”
Judge King found that Wal-Mart repeatedly and willfully violated Minnesota labor laws or its contract with its employees on the issues of contractual rest breaks, statutory meal breaks, shaving time from paid rest breaks and failure to maintain accurate records.
In the decision, the judge found that Wal-Mart was aware that employees were not receiving breaks to which they were entitled. “In essence, they put their heads in the sand,” King stated.
He found that Minnesota law requires every employer to provide its employees with a sufficient time to eat a meal. King stated, “No time to eat a meal is not a sufficient time to eat a meal.” King found that Wal-Mart violated the meal break law 73,864 times.
Possible punitive damages
The judge ordered a second phase of the trial to begin Oct. 20 to allow a jury to determine the amount of punitive damages and the amount of statutory penalties to be imposed against Wal-Mart. Minnesota’s wage-and-hour laws allow for a penalty of up to $1,000 for each violation. If the jury awards the full $1,000 penalty for each of the 2 million violations, the award could be in excess of $2 billion.
“This first award from Judge King is just the beginning,” said William Sieben, one of the attorneys representing the workers. “This award only reimburses these employees for compensation they should have already received from Wal-Mart. The next phase of the trial will be to punish and penalize Wal-Mart for willfully violating the rights of these 56,000 people whose average wage was under $10 an hour.”
In testimony that began last September, attorneys presented mountains of evidence – everything from payroll records, tax records, and company reports to memos and e-mails.
Wal-Mart, the world’s largest employer, keeps voluminous records on all its stores on a computer larger than the one in the Pentagon. Attorneys for the workers were able to use the company’s own records against it.
In a statement, Wal-Mart executives said they are considering an appeal. “We respectfully disagree with portions of the decision,” spokeswoman Daphne Moore told the Reuters news agency.
The company’s 2006 Annual Report stated that Wal-Mart faced 57 wage-and-hour lawsuits across the United States, including the Minnesota case.
In December 2005, a California court ordered Wal-Mart to pay $172 million in damages for failing to provide meal breaks to nearly 116,000 hourly workers. Last year in Philadelphia, workers won $78 million in a lawsuit against Wal-Mart over similar violations.
“This case stands for the proposition that the largest and most profitable retailer in the world has to follow the same laws and honor its contracts just the same as any other business in America,” said Sieben.
‘Always the bottom line’
The United Food & Commercial Workers union, which has been trying for years to organize Wal-Mart, also lauded Judge King’s ruling.
In a statement headlined “Wal-Mart – Always, Always the Bottom Line,” UFCW Local 789 in South St. Paul called on the state Department of Labor & Industry “to levy to the fullest extent of the law a penalty which would require Wal Mart to clean up its act and observe all existing state and federal statutes.”
Wal-Mart’s violation of wage-and-hour laws is part of a pattern that includes union-busting, employment discrimination and child labor infractions, Local 879 said.
“While we are pleased that the judge ruled in favor of the workers, we are sure Wal-Mart’s behavior will continue until the workers have a voice at work,” the union said.