Cairo Association of Teachers - Newsletter

CAT Tracks for December 23, 2005 ECONOMICS 101

Attention Wal-Mart CEOs: There is no such thing as a free lunch.

A California jury awards suing workers $172,000,000 for lost lunch breaks.

Next question to be answered for Wal-Mart: "Can we pay men more than women?"

Looks like Wal-Mart's PR push is facing new challenges!

From the Associated Press...

California workers claimed they were denied lunch breaks

OAKLAND, California (AP) -- A California jury on Thursday awarded $172 million to thousands of employees at Wal-Mart Stores Inc. who claimed they were illegally denied lunch breaks.

The world's largest retailer was ordered to pay $57 million in general damages and $115 million in punitive damages to about 116,000 current and former California 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.

The damages were originally tallied as $207 million after a court clerk misread the punitive damages as $150 million. The amount of punitive damages was later clarified. (Watch the facts of the case -- 1:02)

The class-action lawsuit in Alameda County Superior Court is one of about 40 nationwide alleging workplace violations by Wal-Mart, and the first to go to trial. The Bentonville, Arkansas-based retailer, which earned $10 billion last year, settled a similar lawsuit in Colorado for $50 million.

In the California lunch-break suit, Wal-Mart claimed that workers did not demand penalty wages on a timely basis. Under the law, the company must pay workers a full hour's wages for every missed lunch.

The company also said it paid some employees their penalty pay and, in 2003, most workers agreed to waive their meal periods as the law allows.

The lawsuit covers former and current employees in California from 2001 to 2005. The workers claimed they were owed more than $66 million plus interest, and sought damages to punish the company for alleged wrongdoing.

Attorney Fred Furth, who brought the case on behalf of the workers, said outside court that the jury "held Wal-Mart to account."

Wal-Mart attorney Neal Manne said the jury's verdict, reached after nearly three days of deliberations and four months of testimony, would likely be appealed.

He claimed the state law in question could only be enforced by California regulators, not by workers in a courtroom. He added that Wal-Mart did not believe the lunch law allowed for punitive damages.

"We absolutely disagree with their findings," Manne said of the jury's verdict. He conceded that Wal-Mart made mistakes in not always allowing for lunch breaks when the 2001 law took affect, but said the company is "100 percent" in compliance now.

The lawsuit was filed by several former Wal-Mart employees in the San Francisco Bay area in 2001, but it took four years of legal wrangling to get to trial.

The verdict comes as the company is waging an intense public-relations campaign to counter critics aiming to stop the retailer's expansion and make it boost workers' salaries and benefits.

Paul Blank, campaign director for WakeUpWalMart.com, an union-affiliated advocacy group that believes Wal-Mart's policies over wages, health benefits and other issues harm families and communities, said he was delighted by the verdict.

"It is a sad day when Wal-Mart provides these so-called low prices by exploiting their workers and even the law," Blank said.

The company added lower-cost health insurance this year after an internal memo surfaced that showed 46 percent of Wal-Mart employees' children were on Medicaid or uninsured.

A federal lawsuit pending in San Francisco accuses the company of paying men more than women.

And...from the New York Times...

By LISA ALCALAY KLUG

BERKELEY, Calif., Dec. 22 - A California jury on Thursday ordered Wal-Mart, the world's largest retailer, to pay $172 million in damages for failing to provide meal breaks to nearly 116,000 hourly workers as required under state law.

The verdict came after a trial that lasted more than three months in a class-action suit filed at Alameda County Superior Court in Oakland.

The suit, filed on behalf of employees of Wal-Mart and Sam's Club stores in California, argued that the chain violated state law more than eight million times from Jan. 1, 2001, to May 6, 2005, said the plaintiffs' lawyer, Jessica Grant of the Furth Firm of San Francisco.

California law requires that employers provide a meal break of 30 minutes for every five hours on the clock, Ms. Grant said. If the break is shorter than that, provided late or not at all, the employer must pay an hour's pay, she said.

"What happened here is that Wal-Mart didn't make a single payment for 2001 and 2002 and only started paying in 2003 after we asked for permission to go forward as a class action," Ms. Grant said.

Responding to the verdict, Wal-Mart issued a statement saying that it planned to appeal, that the decision was unique to California and that it had no bearing on any other state.

Wal-Mart is facing similar cases in about 40 other states, Ms. Grant said.

The jury ordered the company to pay $57 million in general damages and $115 million in punitive damages.

"It sends a very strong message to Wal-Mart that it is not acceptable to work employees 7, 8, 9, 10 hours a day without meal breaks," Ms. Grant said.

A work law expert, Gillian Lester, a visiting professor of law at the University of California, Berkeley, said: "This in an important verdict. I agree with the plaintiff's attorneys that this is going to be an influential decision."

In its statement, Wal-Mart said it had "acknowledged it had compliance issues when the statute became effective in 2001."

"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 read. "The system will automatically shut down registers if the cashier does not respond."