Wal-Mart has yet another legal headache to add to its growing litigation problems. A Circuit Court Judge in Jackson County, Missouri this week granted class action status to a lawsuit filed by as many as 250,000 Wal-Mart workers in Missouri who were employed by the giant retailer or at its Sam’s Club division, between August 15, 1996, and June 30, 2003. The lawsuit, which was first filed four years ago, charges that Wal-Mart forced its workers to work “off the clock” without pay, and prevented the workers from taking lunch and rest breaks. Judge Sandra Midkiff’s decision means the workers do not have to individually sue Wal-Mart, and it raises substantially the financial liability that Wal-Mart could be facing if it settles or loses the case. The attorney for the plaintiffs told the Associated Press that Wal-Mart’s actions were part of “an overall policy designed to reduce labor costs by failing to pay employees for all of their breaks.” The attorneys claim that “Based on Wal-Mart’s own data, it’s abundantly clear they’re forcing employees collectively to work many thousands of hours each month without pay. What they’re doing is illegal.” There are at least 36 similar lawsuits facing Wal-Mart in other states. The company has already settled a similar lawsuit in Colorado for $50 million, with a class size of one-third as many as the Missouri workers. A Wal-Mart spokesman said, “We strongly deny the allegations in this lawsuit and are considering our options. Wal-Mart’s policy is to pay associates for every minute they work. Any manager who requires or even tolerates ‘off-the-clock’ work would be violating company policy and subject to disciplinary action, up to and including termination.”
In a footnote to its 2005 Annual Report, Wal-Mart warns its stockholders that “the company is involved in a number of legal proceedings, which include consumer, employment, tort, and other litigation,” and says that if the company loses these suits, it could result “in liability material to the company’s financial condition or results of operations.” Wal-Mart explains that “numerous cases” containing class action allegations” have been brought under the Fair Labor Standards Act, or similar state laws. The company listed 13 states where class action status was denied, and lists 6 states where class action status has already been granted (California, Colorado, Massachusetts, Minnesota, Oregon, and Washington.)
