Wal-Mart Loses Appeal of $187 Million Verdict in Worker Lawsuit

Wal-Mart Stores Inc. (WMT), the world’s largest retailer, lost its appeal of a $187.6 million verdict in a case accusing the company of denying Pennsylvania workers rest and meal breaks.

A three-member appeals court panel ruled June 10 that there was “sufficient evidence” in the record to conclude Wal-Mart violated state wage laws for contractual rest breaks. The court ruled that the trial court must recalculate more than $45 million in attorneys’ fees in the case.

“Wal-Mart’s own internal audits revealed violations of company policies regarding missed breaks and work off-the- clock,” the panel said in a 211-page opinion.

The verdict is the largest against Wal-Mart over missed breaks, Michael Donovan, an attorney for the Pennsylvania workers said. Wal-Mart agreed to pay as much as $640 million in 2008 to settle more than 60 federal and state lawsuits over similar claims.

Former Wal-Mart employees Dolores Hummel and Michele Braun sued the company in state court in Philadelphia over claims they were pressured by store managers to skip breaks and cut meals short. Lawyers for the women argued that the company made workers skip more than 33 million rest breaks from 1998 to 2001 to boost productivity and cut labor costs.

Wal-Mart argued on appeal that the trial court erred in certifying a class of about 187,000 current and former employees and refusing to dismiss claims under the state wage laws.

‘Unique Facts’

In its decision, the appeals panel wrote, “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.”

Greg Rossiter, a spokesman for Bentonville, Arkansas-based Wal-Mart, said today that the retailer is committed to paying employees for every hour they work and providing them with meal and rest breaks.

“That’s our policy and we take it very seriously,” Rossiter said in a phone interview. “In this case, we believe the trial court’s decision was wrong in a number of respects and we look forward to additional review in the courts.”

Donovan called the ruling a “well-reasoned decision in support of workers’ rights.”

The Pennsylvania cases are Braun v. Wal-Mart Stores Inc., 3373 EDA 2007, and Hummel v. Wal-Mart Stores Inc., 3376 EDA 2007, Superior Court of Pennsylvania.

To contact the reporter on this story: Sophia Pearson in Wilmington, Delaware, at spearson3@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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