Some 100,000 current and former hourly employees of Wal-Mart and Sam’s Club stores in Minnesota – and the state of Minnesota itself – will share up to $54 million from the giant retailer under a settlement announced Tuesday.
The agreement is the final stage in a wage-and-hour class action suit that put a spotlight on Wal-Mart’s practice of having employees work through their rest and meal breaks. In July, Dakota County District Judge Robert King ruled the company committed more than 2 million violations of the Minnesota Fair Labor Standards Act and ordered it to pay $6.5 million in back pay.
The judge then scheduled a jury trial to determine the amount of civil penalties and punitive damages. By reaching a settlement, the parties avoided going to trial.
People eligible for the settlement worked at Wal-Mart Stores and Sam’s Clubs locations in Minnesota from Sept. 11, 1998, through Nov. 14, 2008. The agreement also includes “a substantial payment to the State of Minnesota,” according to a joint statement released by Wal-Mart and Maslon Edelman Borman & Brand, one of the law firms representing the workers.
“We are satisfied with this settlement, gratified that these hourly workers will now be paid after seven years of litigation, and happy that the State of Minnesota will receive the largest wage and hour civil penalty in its history,” said Justin Perl, one of the attorneys for the workers.
“Wal-Mart is pleased that the court in Minnesota ruled in its favor on many claims,” said Wal-Mart spokesperson David Tovar. “Our policies are to pay every associate for every hour worked and to make rest and meal breaks available for associates. Any manager who violates these policies is subject to discipline, up to and including termination. We remain committed to providing good jobs with real career opportunity to the 1.45 million U.S. associates who choose to work for Wal-Mart and serve our customers every day.”
In his ruling in July, 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.
In testimony before Judge King, former Wal-Mart workers described being forced to miss breaks so they could keep up with the work, even to the point of not having time to go to the bathroom.
As part of the settlement, Wal-Mart has agreed to maintain various electronic systems, surveys, and notices that will further compliance with wage and hour policies and Minnesota laws. The settlement is subject to approval by the trial court, and the exact amount paid to class members will depend on the court’s approval as well as on the number and amount of claims that are submitted by class members, the parties said.
A hearing for preliminary approval of the settlement has been scheduled for Jan. 14, 2009.