Pennsylvania Court Affirms $187.6M Verdict Against Wal-Mart For Unpaid Wages
PHILADELPHIA - In March 2002, a class action lawsuit on behalf of an estimated 186,000 current and former Wal-Mart employees throughout Pennsylvania was filed against the defendant retailer in the Philadelphia County Court of Common Pleas seeking compensation for unpaid wages.
The plaintiffs maintained that hourly workers were forced to work through more than 33 million rest breaks between 1998 and 2001 because Wal-Mart managers were under constant pressure to cut labor costs. Store managers also received bonuses that sometimes doubled their pay if they reached profit goals, the plaintiffs alleged.
Wal-Mart's corporate policy stipulates that associates are to receive one paid rest break of 15 minutes during any three-hour shift and two paid 15-minute rest breaks and one unpaid meal break of 30 minutes during a six-hour shift.
The jury in October 2006 found that the retailer knowingly benefited by not paying its employees for all of the time they worked and awarded class members $2.5 million in compensatory damages for time worked without compensation and $76 million in compensatory damages for missed rest and meal breaks. On Nov. 14, the Common Pleas Court judge ruled that Wal-Mart must pay $49.2 million in attorney fees and costs. Wal-Mart appealed.
On appeal, the Pennsylvania Superior Court on June 10, 2011 upheld the $187.6 million class action award against Wal-Mart Stores Inc. supporting the employees' claim that they were owed wages for off-the-clock work and missed rest breaks; however, the appellate panel ordered the recalculation of the $49.2 million attorney fees and costs award . (Michelle Braun, on behalf of herself and others similarly situated v. Wal-Mart Stores, Inc., et al., No. 3373 EDA 2007, Dolores Hummel, on behalf of herself and all others similarly situated v. Wal-Mart Stores, Inc., et al., No. 3376 EDA 2007, Pa. Super.).
In support of its ruling, the Superior Court stated:
"Under these unique facts and the liberal construction of Pennsylvania's class action rules, we hold the record substantiates the trial court's certification of the class and discern no denial of due process. We conclude that monetary payments for contractual rest breaks qualify as 'wages' under the Pennsylvania Wage Payment and Collection Act ('WPCL'). Further, we hold the trial court construed 43 P.S. § 260.10 correctly to permit recovery of statutory liquidated damages and Appellees are entitled to recover under the WPCL. We also hold there was sufficient evidence in the record for a fact finder to conclude there was a breach of contract, unjust enrichment, violation of the Pennsylvania Minimum Wage Act ('MWA'), and violation of the WPCL. Finally, we hold the trial court erred in calculating some of Appellees' counsel's fees by enhancing the lodestar to reflect contingent risk when the lodestar already accounted for contingent risk. Accordingly, we affirm the judgment in part as modified, reverse in part, and remand for further proceedings."
(Abstract of Article from LexisNexis® Mealey's™ Litigation Report Employment Law, Vol. 7, Issue #11, June 2011).