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.''
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.
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.