Wal-Mart will pay $40m to workers
Settlement is biggest in Bay State history

By Dave Copeland, Globe Correspondent | December 3, 2009

Wal-Mart Stores Inc., the world’s largest retailer, has agreed to pay
$40 million to as many as 87,500 current and former employees in
Massachusetts, the largest wage-and-hour class-action settlement in the
state’s history.

The class-action lawsuit, filed in 2001, accused the retailer of denying
workers rest and meal breaks, refusing to pay overtime, and manipulating
time cards to lower employees’ pay. Under terms of the agreement, which
was filed in Middlesex Superior Court yesterday by the employees’
attorneys, any person who worked for Wal-Mart between August 1995 and
the settlement date will receive a payment of between $400 and $2,500,
depending on the number of years worked, with the average worker
receiving a check for $734.

“The magnitude is large - it’s bigger than most settlements paid in
wage-and-hour cases,’’ said Justin M. Swartz of New York-based law firm
Outten & Golden LLP, who has handled similar cases, including a pending
case against Wal-Mart. “But you would expect it to be bigger since
Wal-Mart is the biggest retailer.’’

Under the terms of the settlement, neither side is allowed to comment.
But in an affidavit filed with the settlement, the lead counsel for the
employees, Philip Gordon of Boston’s Gordon Law Group, said the accord
“dwarfs settlements of similar class actions against Wal-Mart across the
country.’’

“For many employers, this settlement will serve as a reminder to take
the payment of earned wages and benefits seriously. For many other
employers, it will provide comfort that all Massachusetts businesses
must operate on a level playing field,’’ Gordon wrote in the affidavit.
“But most importantly, for employees of Wal-Mart, it finally pays them
their earned wages and it puts in place systems and processes to ensure
that abuses like those alleged never happen again.’’

The Massachusetts case is similar to many others that have been brought
against the retail behemoth by employees across the country, most
alleging that the Bentonville, Ark.-based company violated laws by
requiring employees to work through breaks, to work beyond their regular
shifts, and similar practices. Wal-Mart has denied the allegations, but
in December, the merchant agreed to pay up to $640 million to settle 63
federal and state class-action wage-and-hour lawsuits.

The Massachusetts case, which was not part of that settlement, was
initially filed eight years ago on behalf of 67,000 people who worked
for Wal-Mart in Massachusetts between 1995 and 2005. The two plaintiffs,
Elaine Polion and Crystal Salvas, left Wal-Mart years ago. The case has
been moving back and forth for years, first being certified as a class
action, being almost thrown out as a trial date approached in 2006, and
then being revived on appeal and sent back to trial as a class action by
the state Supreme Judicial Court two years ago.

This isn’t the first wage case settlement for Wal-Mart in Massachusetts.
In September, the retailer settled an investigation of violations of
state meal-break policies, agreeing to pay $3 million. The state
attorney general investigated after workers reported they were required
to work though meal breaks, take breaks after having worked more than
six hours, or to cut such breaks short, according to the state.

After some preliminary skirmishes over the terms of the latest
Massachusetts settlement, the lawsuit was set to go to court this week,
but lawyers for the company and employees alerted the court they would
be filing settlement papers instead. In the settlement affidavit, Gordon
said his firm had begun tracking down as many former Wal-Mart employees
as possible.

A phone number could not be located for Polion, and a phone listing for
Salvas was disconnected. Workers approached yesterday by The Boston
Globe at a Wal-Mart parking lot in Raynham declined to comment on the
settlement.

Sean Blais, who worked at a Wal-Mart in Weymouth for a year before he
was fired for texting at work in July, said he thought the accord “seems
reasonable.’’ Blais, 19, said while he did not notice any discrepancies
in his pay, he routinely had trouble scheduling breaks during his shift.

“You got a 15-minute, unpaid break, but you usually had to fight to get
it,’’ he said.

David Reis, chairman of law firm Howard Rice’s labor and employment
practice in San Francisco, said Wal-Mart has probably already addressed
the alleged practices in the suit. “Given that this suit was filed more
than eight years ago, I would expect that any alleged suspect pay
practices have been remedied by Wal-Mart long ago and that this
settlement is simply a calculated business decision that it’s cheaper
and easier for the company to resolve the case and move forward than to
continue paying its lawyers to fight it,’’ said Reis.

Prior to the latest Wal-Mart settlement, the biggest wage-and-hour case
payout in Massachusetts was $14.5 million last year by Canyon Ranch. In
that lawsuit, the owners of the Lenox spa were accused of not passing
along gratuities to workers. The settlement affected 600 workers.