Wal-Mart Stores Inc. could pay between $43 million and $86 million to settle class-action wage-and-hour lawsuits brought by former employees in California.
This story first appeared in the May 13, 2010 issue of WWD. Subscribe Today.
The potential settlement, revealed in court documents filed Tuesday in U.S. District Court in Oakland, pertains to two suits brought in California federal courts in 2006 and later consolidated. The complaints accused the retailer of failing to correctly compensate former employees for vacation and overtime after they had left the company.
The agreement, which still needs court approval, would apply to about 232,000 employees, according to court documents. The plaintiffs contend that, at its maximum, the payment would be comprised of $12 million in wages and $74 million in penalties and interest. Under the terms of the proposed deal, however, Wal-Mart does not concede that any wages remain unpaid, that the class is entitled to any penalties or interest or that any injunctive relief is necessary.
The settlement does call for the world’s largest retailer to acknowledge the suits caused it to implement “remedial measures” to resolve problems with final payments to employees and calls for Wal-Mart to continue using its improved payment technology for at least three years.
A spokesman for the Bentonville, Ark.-based retailer on Wednesday declined to comment.
The company disclosed the settlement in a release directed toward its investors, and said the payment would not impact results in the first and second quarters.
In recent years, Wal-Mart has acted to close a number of outstanding wage suits with settlements. In 2008, for example, it said it would pay up to $640 million to end 63 such actions in courts across the country. In December, it agreed to a $40 million settlement with former and current workers in Massachusetts.
Separately on Wednesday, Wal-Mart declined comment on a Reuters report that it was in early talks to acquire the Russian hypermarket operator Lenta.