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Sat, Dec 24, 2005 - Page 12 News List

Jury orders Wal-Mart to pay millions in damages

PENALTY The retail giant must pay US$172 million for failing to provide meal breaks to 116,000 employees, who filed a class action suit in California state court


Employees give the Wal-Mart cheer during their daily staff meeting at the then soon-to-be-opened Wal-Mart Palmdale Supercenter department store in Palmdale, California, in this photo from Aug. 18.


A California jury on Thursday ordered Wal-Mart, the world's largest retailer, to pay US$172 million in damages for failing to provide meal breaks to nearly 116,000 hourly workers as required under state law.

The verdict came after a trial that lasted more than three months in a class-action suit filed at Alameda County Superior Court in Oakland.

The suit, filed on behalf of employees of Wal-Mart and Sam's Club stores in the state, argued that the chain violated state law more than 8 million times from Jan. 1, 2001, to May 6 this year, said the plaintiffs' lawyer, Jessica Grant of the Furth Firm of San Francisco.

California state law requires that employers provide a meal break of 30 minutes for every five hours on the clock, Grant said. If the break is shorter than that, provided late or not provided at all, the employer must pay an hour's pay.

"What happened here is that Wal-Mart didn't make a single payment for 2001 and 2002 and only started paying in 2003 after we asked for permission to go forward as a class action," Grant said.

Responding to the verdict Wal-Mart issued a statement Thursday saying it planned to appeal, that the decision was unique to California and that it had no bearing on any other state. The retailer is facing similar cases in about 40 other states, Grant said.

The jury ordered the company to pay US$57 million in general damages and US$115 million in punitive damages.

"It sends a very strong message to Wal-Mart that it is not acceptable to work employees 7, 8, 9, 10 hours a day without meal breaks," Grant said. A work law expert, Gillian Lester, a visiting professor of law at the University of California, Berkeley, said: "This in an important verdict. I agree with the plaintiff's attorneys that this is going to be an influential decision."

In its statement, Wal-Mart said it had "acknowledged it had compliance issues when the statute became effective in 2001."

"Wal-Mart has since 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," the statement read. "The system will automatically shut down registers if the cashier does not respond."

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