A state court judge in Minnesota has ruled that Wal-Mart Stores Inc. repeatedly broke Minnesota labor laws. This was the third straight defeat in a wage class action trial for Wal-Mart. A jury may now order the giant retailer to pay as much as $2 billion in damages. The company required hourly employees to work off-the-clock during training and denied full rest or meal breaks in violation of state wage and hour laws. The ruling by Judge Robert King, Jr. came following a non-jury trial. Judge King ruled Wal-Mart broke labor laws more than 2 million times and ordered the company to pay employees $6.5 million in back-pay. The judge wrote in his ruling:
Wal-Mart’s failure to compensate plaintiffs was willful. Wal-Mart was on notice from numerous sources of the wage and hour violations at issue and failed to correct the problem.
The Minnesota lawsuit is one of more than 70 cases, including class actions, in which Wal-Mart has been accused of wage-law violations. The giant retailer lost a $78 million jury verdict in Pennsylvania in 2006 over rest breaks and unpaid work and a $172 million verdict in California in 2005 over meal breaks. Both verdicts have been appealed. It has been reported that Wal-Mart is involved in more litigation over alleged violations of wage and hour laws than any other company.
Judge King’s decision means Wal-Mart will face a second trial in Minnesota state court, this time before a jury. Minnesota labor law allows a fine of up to $1,000 per violation of wage and hour rules. With 2 million violations, that may total as much as $2 billion. At the trial, which will start on October 20th, jurors will determine how much each violation is worth. They will also consider punitive damages. Wal-Mart will most likely appeal.
The lawsuit was filed by four women on behalf of about 56,000 Wal-Mart and Sam’s Club employees. The workers claim that company managers denied breaks to keep down labor costs. The Minnesota suit was granted class-action status in 2003. The company also faces class-action suits in state courts in New Jersey, Washington and Missouri. Wal-Mart has fought off class certification in multiple states including New York, Illinois and Maryland. A federal court ruled on June 20th in Wal-Mart’s favor, denying class status to workers in four states who claimed the company denied rest breaks and manipulated time cards to “shave” their pay. It will be most interesting to see how the Minnesota case comes out. Lots of folks are watching with anticipation.
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