Wal-Mart has learned the hard way this week that there’s literally no free lunch. In its 2005 Annual Report to stockholders, Wal-Mart warned investors that it was engaged in “a number of legal proceedings” which “may result in liability material to the company’s financial condition… ” That liability came with a price tag of $172 million yesterday, with many more cases still in the legal pipeline. Wal-Mart is facing class action suits for forcing its employees to work “off the clock” and without work breaks in six states already, including California, plus three other states on a conditional class certification basis. In 13 states, class action status has been denied. But on Thursday, December 22nd, a jury in Superior Court in Alameda County, California gave Wal-Mart workers an early Christmas gift — one which they won’t be able to immediately unwrap. The jury awarded $172 million to thousands of Wal-Mart workers who claimed that they were illegally denied lunch breaks. The retailer was ordered to pay $57 million in general damages and $115 million in punitive damages to about 116,000 current and former California workers. The jury found that Wal-Mart had violated a state law requiring employers to provide an unpaid half hour lunch break to employees who work at least six hours. Workers who are denied the break are supposed to receive an extra hour’s worth of pay. This case covers Wal-Mart “associates” who worked at its California stores from 2001 to 2005. Wal-Mart has indicated that it will appeal the verdict, delaying any payout in this case. The California case is similar to class action settlements in Oregon and Colorado. The Colorado case cost the retailer $50 million. Massachusetts, Minnesota, Washington, Georgia, Michigan and Texas class actions have still not been settled. In its statement on the verdict, Wal-Mart says it has “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.” “I think [the verdict] is going to let employers know they must apply with the law and can’t take unfair advantage of their employees,” Mike Christian, an attorney representing the workers, told the Washington Post. “And Wal-Mart has to pay particular attention to that because it has similar pending cases” around the country.
For a company that likes to portray itself as a large caring family, it was caught once again short-changing the very people who help it make its massive fortunes. No lunch break, and no compensation — just one more way Wal-Mart steals from its workers, always. For more history on Wal-Mart’s massive legal headaches, search Newsflash by “lawsuit.”
