THE BLOG

Wal-Mart's Time Theft

11/10/2010 08:36 am ET | Updated May 25, 2011

In December of 2008 Wal-Mart released a staggering list of 63 separate wage and hour lawsuits that had been settled by the company, at cost ranging from $352 million to $640 million, depending on various trial court approvals.

One month later, in January of 2009, Wal-Mart announced another $54 million settlement in a case from Minnesota, followed later by a $172 million settlement in California.

On May 12, 2010, Wal-Mart issued a press release explaining that it had settled two more wage and hour lawsuits, in the so-called Ballard et al. v. Wal-Mart Stores, and the Smith et al. v. Wal-Mart Stores cases -- both from California. The two cases, which were combined, affect more than a couple hundred thousand workers who had to wait years to get the compensation that Wal-Mart owed them.

In the Ballard/Smith statement about the California cases, the retailer said: "Wal-Mart Stores, Inc. has announced the settlement of a wage-and-hour class action lawsuit that has been pending against the company for several years. Under the settlement agreements, the total will be at least $43 million, but no more than $86 million. In addition, Wal-Mart has agreed to continue the use of various electronic systems and other measures designed to maintain compliance with its wage-and-hour policies and applicable law."

The "class" in this case was estimated at 232,000 former workers at Wal-Mart. The plaintiffs say that the Wal-Mart workers will be paid $12 million in vacation pay and $74 million in unpaid wages to terminated workers. In settling the case, Wal-Mart has denied the fact that any wages went unpaid.

These cases were first filed in 2006. The class involves all former California hourly and salaried associates, including those who worked at Sam's Club and company distribution centers -- except for truck drivers -- whose employment with Wal-Mart ended after March 20, 2002.

According to court records, this case took four years of "intense litigation" before Wal-Mart decided to settle. More than 1 million court documents were filed, and Wal-Mart vigorously fought the class action status of this case. In February of 2008, a District Judge affirmed the class action status, and Wal-Mart appealed that ruling to the U.S. Court of Appeals. That appeal became moot.

This week, six months after the announcement of the California wage settlement, a Judge in the United States District Court for the Northern District of California, granted final approval to the settlement.

According to a joint statement from lawyers involved in the settlement, "This settlement represents an extraordinary result for the members of this class, with up to $86 million being paid by Wal-Mart to resolve the claim that class members were underpaid approximately $12 million in vacation and other wages when their employment with Wal-Mart ended. The potential additional $74 million payment represents interest and statutorily imposed expenses that Wal-Mart may have faced had the matter proceeded to trial."

One of the lawyers for the class of Wal-Mart workers added: "The case has been hard fought since it was filed four years ago, with Wal-Mart's lawyers presenting a vigorous defense." In other words, Wal-Mart fought hard to prevent these workers from getting the wages they deserved by law.

On their website, the lawyers representing these California Wal-Mart workers, Marlin/Saltzman, LLP, says: "Our clients allege that Wal-Mart has consistently violated California Labor laws by failing to pay all wages and/or accrued vacation time to terminating employees and has further failed to provide terminating employees with final paychecks in a timely manner."

Wal-Mart's response? "Our policy is to pay our associates in an accurate and timely manner. Our communications, processes and systems will help ensure that's the case."

Every year, Wal-Mart produces for its stockholders a footnote in its Annual Report called "Legal Proceedings." That footnote begins: "The Company is involved in a number of legal proceedings." That is perhaps Wal-Mart's biggest understatement of the year. No matter how many settlements Wal-Mart makes, it appears that the retailer is constantly being sued by its own employees. Wal-Mart has the distinction of being the #1 retailer in the world for class action litigation -- much of it spawned by its associates. Is this just a business cost of selling merchandise on the cheap?

Not paying a worker for his or her full hours is a form of time theft -- just as tangible as when a customer steals from Wal-Mart. The retailer calls such theft shoplifting, or shrinkage. What Wal-Mart is charged with is a form of wage-lifting or wage shrinkage.

Wal-Mart can sloganeer all it wants about helping people to 'live better,' but the company should start by applying that slogan to its own workforce -- which would live better if they were paid a decent wage -- and paid for every minute they work for the Waltons.

Al Norman is the founder of Sprawl-Busters.com, and the author of The Case Against Wal-Mart, and Slam-Dunking Wal-Mart.

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