Walmart Unfair Pay Lawsuit Settled In Massachusetts

Current and former Walmart employees in Massachusetts (and their lawyers) were awarded $40 million in back wages this week in a class-action lawsuit. The suit was filed eight years ago, and claimed that the mega-retailer owes some hourly employees up to fourteen years’ worth of unpaid overtime, missed breaks, and other uncompensated work.

The class-action lawsuit, filed in 2001, accused the retailer of denying workers rest and meal breaks, refusing to pay overtime, and manipulating time cards to lower employees’ pay. Under terms of the agreement, which was filed in Middlesex Superior Court yesterday by the employees’ attorneys, any person who worked for Wal-Mart between August 1995 and the settlement date will receive a payment of between $400 and $2,500, depending on the number of years worked, with the average worker receiving a check for $734.

“The magnitude is large – it’s bigger than most settlements paid in wage-and-hour cases,’’ said Justin M. Swartz of New York-based law firm Outten & Golden LLP, who has handled similar cases, including a pending case against Wal-Mart. “But you would expect it to be bigger since Wal-Mart is the biggest retailer.’’

See, maybe this will force management to pay attention to those pesky “labor law” thingies. Walmart denies these allegations, but has also settled 63 similar class-action suits this month.

Wal-Mart will pay $40m to workers [Boston Globe]

http://www.boston.com/news/local/massachusetts/articles/2009/12/03/wal_mart_will_pay_40m_to_workers/

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  1. H3ion says:

    The question is did Walmart receive a bigger benefit from the alleged infractions than they were required to pay in damages? If so, you can probably count on the process continuing.

    • ARP says:

      Exactly. I imagine, that across all their store in the country, they received a much larger benefit than the penalty from all these suits combined (assuming you get caught). Until its not worth it, they’ll continue to do it.

    • nofelix says:

      Minus legal fees. And maybe minus PR and lobbying costs if they’re going to tackle the public opinion backlash.

      • pecan 3.14159265 says:

        What public opinion backlash? You think the people who want to “save more, live more” are going to ditch Wal-Mart because it happens to violate labor laws? No, as long as they can still get stuff for cheap.

        • Loias supports harsher punishments against corporations says:

          You make a good point, but there are certainly people that would are dollar conscience, but also conscience-conscience and don’t shop at Wal-Mart because of these issues. It does effect their public opinion and their profit margins to treat employees poorly.

          • DangerMouth says:

            There always have been people for whom the bottom line is calculated by more than the few cents saved, but that hasn’t prevented Walmart from becoming the largest retailer in the US.

            I can dream , but I really can’t imagine Walmart losing market share over this. What would be telling is to find out how many of these ‘former and current employees’, and their family and friends, still shop at walmart. I bet plenty of them still do.

        • Naame says:

          Well, I did for that reason and others pertaining to Walmart. I have a few friends which have done the same with them. However, you are probably right. People like me and my friends are few and far between. It is hard enough finding people that are even aware of a lot of the nasty things Walmart has done let alone stop shopping there even if their prices are the cheapest.

    • perruptor says:

      Wal-Mart has been caught doing this several times before. Aside from the people it does it to, almost no one seems to care. Expect it to continue.
      http://www.nytimes.com/2007/01/26/business/26walmart.html?_r=3&fta=y
      http://www.cbsnews.com/stories/2002/12/20/national/main533818.shtml
      http://www.startribune.com/business/35819094.html

  2. polster says:

    Again in all Class action lawsuits it looks like the only winners are the lawyers and actual ‘Victims’ get pennies on the dollar! There needs to be huge reform in the way class action lawsuit judgments are dispersed in the this country.

    • Daemon Xar says:

      Citation?

      There are lots of problems with class action lawsuits, and there should be some reforms. But they’re not just about lawyers making a lot of money (though some clearly are). They serve an important and legitimate purpose in allowing suits in cases where individual damages are to low to justify the costs, and provide a great deal of efficiency for the already over-burdened court system. They allow one case to resolve many individual claims instead of requiring re-litigation of the same sets of issues.

      As an attorney, it’s a bit frustrating that every societal problem = lawyers fault + need for reform to fight those naughty lawyers. The high cost of healthcare is demonstrably NOT solely the fault of attorneys, and implementing damage caps actually raises the average settlemtn in medical malpractice suits.

      And this is coming from me, a person who probably dislikes the average lawyer (including my former classmates) more than most.

  3. jayphat says:

    As someone who lived through this, I have to wonder where this happened at. I know in the several stores I worked in, people bent over backwards, going all the way back to at least 1998 that I can remember, to ensure that if you were doing ANYTHING that was considered work (even asking where you left a report for Gods sake, a 4 second conversation) that you got paid for it. That’s not to say that as an hourly I didn’t break the rule. For a 2 year period, I did paperwork during my breaks because it was the only time of day I could get people to leave me the hell alone so that I could do paperwork.

    • mythago says:

      Well, yeah, that’s kind of the point. If they’re pretending to be Very Serious about breaks but making it impossible for you to get your work done unless you do it over a break, that’s a violation of the law.

  4. henrygates3 says:

    The only reason this is coming to light is because it is backed by a law firm pushing a class action lawsuit. They stand to make a lot of money from the whole deal. Look at any low paying job; deli’s, quick lube shops, fast food, child care workers, etc. Anywhere that corporate pushes hard to keep labor down, small uneducated managers will ignore labor laws (if they even know what a labor law is) to make their numbers look good. As a sad unemployed person working cheap manual labor I see it every day.

    • baquwards says:

      Working retail for many years of my life, it is pretty obvious that companies know that their workers have to work off the clock to get their jobs done. As a former manager, I was only given about 60% of the hours that I needed to get the work done, I would have to do paperwork off the clock just to get everything done, and if I didn’t get everything done, there was hell to pay.

      • Inglix_the_Mad says:

        At my station I had people “punch out” (the register, not the actual time-clock – they received paid lunch / breaks) and sit in back, out of view for breaks. Granted, this was years ago.

        At BB we had paid breaks and were told to get out of view, but that was an even longer time back.

        Yeah, I’ve seen some a$$holes too. One chain my sister worked at didn’t really care if you got a break. I won’t even go into the foodservice pizza pizza job my brother had in high school. Yeah, they got breaks, if it was a dead f*ckin’ day because the store had to be clean and it’d better not require overtime to do it. This applied on even very (typically for pizza) busy days like the sporting events, et al. when everyone and their brother was ordering pizza.

        Socialist-Mart not paying overtime? Color me unsurprised. Walton didn’t get rich by paying out one more penny than he absolutely had to. Socialist-Mart relies on the cities and towns to improve things, blackmail for tax breaks, and dodge as much tax as possible (shifting profits to Arkansas, et al.) all while teaching their employees to suck up every social service possible so they can avoid paying any higher wages. Commie Club isn’t any different.

        So the funny thing is, Socialist-Mart and Commie Club are taxpayer funded institutions. They use my tax monies (and many others) to for “improvements” before they’ll put a store in, push for specialty tax exemptions in many areas including property tax assessments, and teach their employees to sponge off social services. All of it, raising my, and others, tax bills. Isn’t it a grand thing?

        • doctor 7 says:

          Why are you referring to Wal-Mart as being “socialist”? It is not even close to be a socialist company.

          • P=mv says:

            Agreed, Walmart is not socialist. It may be evil in many ways, but the words socialism and communism are not synonymous with the devil.

            • Inglix_the_Mad says:

              For as much as Socialist-Mart howls about taxes, and demands tax breaks, they are utterly dependent upon government services to keep their employee costs low. So the gubbermint taxes are ebil only when they apply to Socialist-Mart. Their whole business model is predicated around cheap pricing right? Union representation get’s voted in, they typically close the store (or outsource the work entirely).

              The straw that broke the camel’s back for me, was when my sister-in-law at the time went there and got a job. My brother had been injured in an auto accident and was unable to work for a year (yes that sucked, he still has problems, but like he says, he can walk and use his arms). They gave her tons of info about how to get “free” health insurance (Badgercare), and other “free” programs. This was, and probably still is, commonplace there. Now that wouldn’t be so bad to me, except I remember sitting in the common council meetings with the Socialist-Mart a$$ asking for a property tax exemption. I remember that same a$$ demanding (oh so politely) the roads be widened there, 5 years ahead of schedule, but not to charge them even half value.

              Socialist-Mart CANNOT exist without the ebil gubbermint. Sure it may dodge every penny of tax it can, but it makes damn sure it’s employees know how to suck every last penny from the government teat while they rail about taxes publicly. That’s why I don’t shop there. Why should I pay for the privilege of my taxes supporting their profits?

              • psm321 says:

                Dude, a system where coporations and the government are intertwined is _not_ socialism, but pretty much the exact opposite. There’s another term for it that I won’t mention here for fear of igniting a flame war, but you can look it up.

              • doctor 7 says:

                Again I have to ask why you’re calling them socialist mart? Everything you’ve described is not socialism.

        • kmw2 says:

          Actually, that’s pure capitalism at work. Maximizing profits through as many externalities as possible and extracting as much value from workers as possible sounds pretty darn capitalist to me.

        • RandomHookup says:

          To be fair to Walton, in the early days of the stores, the employees were doing quite well on employee stock purchase. There were quite a few very well-off greeters who didn’t care much about their hourly wage, but did pay attention to the stock price.

        • DH405 says:

          You keep using that word. I do not think it means what you think it means.

    • gStein_*|bringing starpipe back|* says:

      at one of my former jobs, someone was injured, so was out for the whole week. i wound up working 70 hours that week (i was only supposed to be working 30-35, pulled double shifts to make up for her). my boss told me that she couldn’t afford to pay me overtime, so she would put 30 hours on the following week (which i had off).
      i told her that it was not an acceptable situation, and that i agreed to work the extra hours with the understanding that i would get overtime. i wound up talking to HR, who told her that she had to give me those 30 hours at time and a half.

      I also worked through Adecco (temp staffing) for a summer – their policy was to round down your daily hours worked to the next 15 minutes. so, if you worked 4 hours 43 minutes, you got paid for 4 hours 30 minutes.

      • MsFab says:

        I used to work as a recruiter for Adecco, and input time sheets for our workers, and I’ve never heard about or seen that policy in action.

  5. gStein_*|bringing starpipe back|* says:

    doesn’t that work out to something less than $1/day worked?

  6. Sean Michael says:

    As a current employee, I recently missed 3 of my breaks, all on black friday. I ended up working 13 hours that day, 1245 am to 145 pm. My managers and supervisors all left around 10am. left me a a few others there by myself.

  7. fredbiscotti says:

    Sounds like Wal-Mart employees need a union.

  8. mandy_Reeves says:

    wonder if the New Jersey one will get the same result…i have to fill out my form still

  9. tonberryqueen says:

    63 similar suits THIS MONTH?

    That’s a heckuva lot of class-action lawsuits.

  10. Snarkysnake says:

    I think that this is a great result for the workers. Wish they had gotten more. When you work ,you should be paid. Period. As for the commenters lament the fact that a law firm is getting a big chunk ‘o change…That’s the only way that these people would get anything. They are (probably) too poor to hire a lawyer to seek damages,so a hired gun with an incentive to win is their best route.

    I do agree that the fine or settlement in these cases should be higher than the amount lost by workers. Any other outcome would become a business strategy on the part of large companies to skirt minimum wage/labor laws. Make it more expensive to screw the workers and this stuff will slow down.

    • henrygates3 says:

      I don’t care that the lawyers are making money off of this, but the only reason the employees are seeing justice is because the lawyers are making big off their plight. There are millions of people with the same problem or worse – but because they are under the radar, they’re screwed.

  11. RecordStoreToughGuy_RidesTheWarpOfSpaceIntoTheWombOfNight says:

    Didn’t an earlier article mention Wal-Mart’s reputation for not settling out-of-court? It probably says a lot to their culpability if they went ahead and settled this, rather than fighting a protracted court battle. :-/

  12. burnedout says:

    It isn’t just WalMart – any retail establishment will come up with ways to get you to work your breaks, and the customers are as much to blame as management.

    Example: I was an asst. manager for American Eagle for a few years. We were required to keep two people (one of them management) in the store at ALL times. During the slower times of the year – we didn’t have the budget to have more than two people in the store at all. It wasn’t usually a problem for the part-timers since their shifts were usually short enough to not require a break, but management was expected to tough it out because we had to have two people in the store. Of course, if we were scheduled for an 8-hour shift we were only paid for 7.5 (gotta stick to the law, kiddos!), but we weren’t allowed to leave the sales floor.

    On weekends when there were more people working managers could send an associate out to pick us up lunch and then leave the salesfloor to take eat quickly, but couldn’t leave the store itself unless another manager was there. Of course, try telling the suburban mom who’s pissed because her 15% off coupon is expired that the manager is taking his/her federally required break. If I was the only manager in the store, I pretty much didn’t get a break.

    I once told a new employee that I was going to eat fast and be back, and she actually told a customer that I was “on break and couldn’t be bothered.” The woman CAME INTO THE STOCKROOM to insist that I help her. She even said, “how dare you think you can just sit around on the job?” I didn’t bother to explain the whole “not paid for this half hour because of the LAW,” but when stores are crunched for money and customers are PSYCHO it’s pretty much next to impossible to squeeze in a break.

    To be totally fair to AE, though, they never hassled me about any OT we racked up to get our work done. It didn’t happen often, but that company (at least at the time) understood that we couldn’t predict rushes, floorset issues, and suburbanites being crazy so when we DID have employees pick up a few time and a half hours it wasn’t an issue. Not true at other jobs.

    • RockaRolla says:

      The law requires a break, it does’nt require it to be unpaid. Paid breaks used to be common in (good) manufacturing jobs. Now most of those jobs pay $1.50 an hour to Chinese workers with no breaks.At my current job we work 9 hrs and get paid for 9 hrs, so essentially we get paid OVERTIME for lunch. Yes, its a good place to work.

      As I understand the laws here (it may vary by state) you can only be required to stay on the premises during breaks if you are being paid for it. If they arent paying you, you are “off the clock” and can go and do as you please, as long as you are back on time and in a condition to work (ie. drinking your lunch)

      • burnedout says:

        Oh, I know. But there’s the law and then there’s company policy…and when you’re just trying to pay for college you go with the guy who hired you.

  13. Evil_Otto would rather pay taxes than make someone else rich says:

    Because they’ve been reading talking points. “Socialist” has changed meanings to mean “someone/thing that has different political views from us patriotic tax-hating tea-bagging gun-toting town-hall-shouting Glenn-Beck-watching ‘Merkins”.

    For the record: http://tinyurl.com/ygbjaoh

  14. whytcolr says:

    As another poster said, this is something like a dollar a day. Whoopty-doo.

    I’m a little confused to how a $40,000,000 settlement divided amongst 87500 people works out to an average payment of $734, though. Seems like it should be an average of $457, no?

    Oh… But that also assumes that the workers would be getting all $40M. Turns out that the class action attorneys are asking for $15M plus expenses… http://www.bloomberg.com/apps/news?pid=20601103&sid=a2AClc9J8WwE

    (sarcasm) Horray for a victory for the common worker! (/sarcasm)

  15. vladthepaler says:

    Er. If the workers are getting $40 million, and the average worker gets $734, that would imply Walmart has more than 50,000 workers in MA alone. Can that be right? I guess depending on how long the problem went on… still, that’s a pretty staggering number of people.

    And that $734 would have been worth a lot more 8 years ago.

  16. YouDidWhatNow? says:

    You want to know who’s at fault for this?

    …look in the mirror.

    The Great Unwashed Masses flock to W-M like flies to honey (or, if you prefer, poo) because of one reason – cheap prices.

    Stop and think about that. Just exactly how is W-M able to provide such low, low prices on everything?

    Hmmm…maybe doing everything they can to pay their employees as little as they can (or in this case, can’t) get away with?

    And the case of how W-M is destroying the American manufacturing industry. It works like this…

    1. You make a product, and you sell it to retailers. You’re making a living. Then W-M comes knocking, and says they want to buy 90% of your total output. You have a party.
    2. W-M, a while later, says they want a deeper discount, since they’re such a good customer of yours. You look around, trim some fat, and give them a deeper discount.
    3. Another while later, W-M says you need to cut them a better deal. You cut everything to the bone, and sell you product to W-M at a “subsistence” level, such that you’re just barely keeping the finances in the black.
    4. Then W-M comes at you with the backbreaker – give us another cut in price, or we don’t buy your product anymore. At this point, you can no longer survive without W-M, since they buy 90% or more of your output, and they are effectively your only outlet. If you refuse W-M’s demand, you are bankrupt the next day. To accede to their demand, you have to shutter your US manufacturing operations and move them to someplace else, where you can produce them at a price that W-M will pay you for.

    …and now you are just one more statistic smeared on the highway of Wal-Martization.

    So are you, as a consumer, going to stop shopping at W-M because of these (and other) issues?

    …and how about those American workers, who just lost their jobs because their company had to shift production to Taiwan? Where are they going to shop with their unemployment checks? You guessed it…Wal-Mart. Why? Because they can’t afford to shop anywhere else.