Wal-Mart Hammers Out Sweeping Wage and Hour Suits Settlement

December 24, 2008 (PLANSPONSOR.com) - Giant discount retailer Wal-Mart Stores, Inc. has announced a broad settlement agreement with plaintiffs' attorneys in 63 wage and hour class action lawsuits that will cost the company $352 million to $640 million.

A Wal-Mart Web site statement said the final amount of the payments will depend on the amount of claims submitted by employees in the various cases filed around the country over the last several years.

In the statement, Wal-Mart General Counsel Tom Mars said allegations leveled in some of the cases filed in part years “are not representative of the company we are today.”

“Our policy is to pay associates for every hour worked and to provide rest and meal breaks,” Mars continued in the statement. “This is a commitment we make to the more than 1.4 million associates who choose to work for Wal-Mart and serve our customers and members every day. We have worked hard to have the right communication, processes and systems in place to help us live up to this commitment.”

In addition to the payment involved in the settlement, the company said it had also agreed to continue using “various electronic systems and other measures” to help it comply with wage and hour laws and its own internal policies.

The Wal-Mart statement also quoted several plaintiffs' lawyers as applauding the settlement deal.

We are pleased with this settlement and believe it is fair and reasonable for our clients," said attorney Frank Azar, co-lead counsel in fourteen states, in the statement." We are equally pleased that Wal-Mart has made tremendous strides in wage and hour compliance and that it has implemented and agreed to continue to follow state of the art compliance programs so that these improvements will continue into the future. We hope Wal-Mart's compliance programs will serve as an example to other major retailers."

The company pointed out that the settlements still have to be approved by the trial courts involved in each matter.

Each of the settlements is subject to approval by the trial court, and the total amount to be paid will depend on the amount of claims that are submitted by class members. Under the agreements, the total will be at least $352 million, but no more than $640 million. Also, as part of the settlements, Wal-Mart has agreed to continue to use various electronic systems and other measures designed to maintain compliance with its wage and hour policies and applicable law.

Last year, Wal-Mart said it would pay more than $33 million in back wages to thousands of employees after turning itself in to the Labor Department for paying too little in overtime over the past five years. A judge in Pennsylvania also ruled last year that Wal-Mart workers in that state who previously won a $78.5 million class action award for working off the clock will share an additional $62.3 million in damages (See PA Jury Finds Wal-Mart Violated Labor Laws ).

As a result of the latest settlement agreement, the company will record an after-tax charge to continuing operations in its fiscal fourth quarter of approximately $250 million, or approximately $0.06 on earnings per share

More information about specific cases involved in the latest settlement is available here .