Wal-Mart Stores Inc. on Tuesday said it had been ordered by the Pennsylvania Supreme Court to pay $188 million to settle a class-action lawsuit filed in 2002 by employees at Wal-Mart and Sam’s Club who claimed that the retailer failed to pay them for working off the clock and prevented them from taking their full meal and rest breaks.
While it considers its next course of action, Wal-Mart said charges related to the lawsuit will reduce its fourth-quarter earnings by about 6 cents per share.
The Pennsylvania Supreme Court’s opinion largely upholds the judgment that was entered against Wal-Mart in a 2007 case of about $188 million and an award of back-pay plus statutory penalties, attorneys’ fees, and prejudgment interest. Wal-Mart appealed that judgment, and in June 2011, the Pennsylvania Superior Court of Appeals reversed the portion of the ruling dealing with the award of attorneys’ fees, but otherwise affirmed the rest of the judgment. Wal-Mart appealed that decision to the Pennsylvania Supreme Court, which resulted in Monday’s ruling affirming the decision of the appeals court.
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Braun/Hummel v. Wal-Mart Stores Inc. represented about 187,000 employees who worked in Pennsylvania Wal-Mart and Sam’s Club stores between 1998 and 2006. In its unsuccessful appeals, Wal-Mart argued that it was unfairly subjected to a trial by formula rather than having each of the 187,000 workers testify.
“We disagree with the decision, and continue to believe that these claims should not be bundled together into a class-action lawsuit,” Wal-Mart said in a statement. “We are reviewing the opinion closely and considering our options, including a petition for review by the U.S. Supreme Court. Most of these claims are over 10 years old. Wal-Mart has had strong policies in place to make sure all associates receive their appropriate pay and break periods. We have taken additional steps over the last decade, including enhancing our timekeeping systems and additional training, to make sure all our associates understand the importance of those policies and comply with them. We are committed to our 1.3 million associates who work hard every day to serve our customers.”
Wal-Mart’s size and alleged business practices have made it a target of lawsuits, especially class-action lawsuits. The most famous, Wal-Mart Stores Inc. v. Dukes, a class-action, gender-discrimination lawsuit, was brought on behalf of 1 million women who were employed by the retailer since 1998. The case made its way to the Supreme Court, where a majority ruled that the women did not constitute a class. A Wal-Mart spokesman said there are no pending national class-action lawsuits against the company.