Calif. Jury Backs Wal-Mart Workers

Thousands Claimed They Were Denied Lunchtime Breaks

Attorney Fred Furth, right, who represented employees, talks with Wal-Mart attorney Neal Manne. An Alameda County jury awarded $172 million to thousands of California Wal-Mart employees for violating a 2001 state law that requires employers to give 30-minute, unpaid lunch breaks to employees who work at least six hours. (By Jeff Chiu -- Associated Press)

A California jury yesterday awarded $172 million to thousands of Wal-Mart Stores Inc. workers who claimed that they were illegally denied lunch breaks.

The company was ordered to pay $57 million in general damages and $115 million in punitive damages to about 116,000 current and former California workers.

The jury found that Wal-Mart violated a 2001 state law requiring employers to give an unpaid half hour lunch break to employees who work at least six hours. Workers who are denied the break are supposed to receive an extra hour's worth of pay.

The lunch break lawsuit in Alameda County Superior Court covers former and current workers who worked in the state from 2001 to 2005. The employees claimed they were owed more than $66 million plus interest, and sought damages to punish the company for alleged wrongdoing.

Wal-Mart said in a written statement that it would appeal the verdict.

"Wal-Mart has acknowledged it had compliance issues when the statute became effective in 2001. The problems were also experienced by other employers in the State of California. 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 said. The company settled a similar lunch break case in Colorado for $50 million last year.

The California suit is one of about 40 cases nationwide alleging workplace violations against Wal-Mart, the world's largest retailer. In 2002, a federal jury in Oregon found Wal-Mart employees were forced to work off the clock and awarded back pay to 83 workers.

One of the pending cases, which accuses the company of paying men more than women, is the largest private employer civil rights class action in history. Wal-Mart has asked an appeals court to overturn the class action status of the case.

The ruling yesterday was "a very important decision, in part because this was an important case, but also there are 40 or so other class actions pending against Wal-Mart," said Harley Shaiken, a labor professor at University of California at Berkeley. "This is sort of a testing of the waters as to how a jury is going to respond when a group of workers sues Wal-Mart."

"I think [the verdict] is going to let employers know they must apply with the law and can't take unfair advantage of their employees," said Mike Christian, an attorney representing the workers. "And Wal-Mart has to pay particular attention to that because it has similar pending cases" around the country, he said.

The company has been struggling to repair its image in recent months after critics cast negative light on the company, claiming it pays poverty wages and offers few benefits. An internal document leaked earlier this year suggested the company might cut health care costs by hiring younger, healthier workers. Wal-Mart, in response, has launched a massive public relations campaign to improve its reputation.

Wal-Mart has a reputation as a tough legal opponent. Where other companies may settle a case to minimize court costs, Wal-Mart typically fights the cases. "This really is a wake up call to Wal-Mart that these class action suits in front of a jury can be costly," Shaiken said.

The company is also embroiled in a wage and hour case pending in New York state that claims the company failed to give promised breaks to employees.

"I think it's very significant," said Justin Swartz, the attorney representing workers on the New York wage-and-hour case. "It vindicates the thousands of employees nationwide who have claimed that Wal-Mart ignored their rights to be paid for the work they perform."

The lawsuit was filed by several former Wal-Mart employees in the San Francisco Bay area in 2001.