Wal-Mart to Pay $40M to Settle MA Wage-and-hour Suit

December 4, 2009 (PLANSPONSOR.com) – Wal-Mart Stores Inc. has agreed to pay $40 million to settle a class-action lawsuit in Massachusetts in which hourly workers claim managers required them to work off the clock and denied or cut short breaks.

Bloomberg reports that the settlement covers more than 87,000 current and former hourly workers in Massachusetts Wal-Mart and Sam’s Club stores. The company had previously agreed to settle the suit for as much as $40 million, but named plaintiffs objected, claiming the structure of the proposed settlement would leave the maximum payment by Wal-Mart at $20 million, with much of that going to plaintiffs’ lawyers.

An attorney for the workers said the new settlement agreement “obligates Wal-Mart to pay a full $40 million, with no amounts reverting back to them in the event of unclaimed funds or otherwise,” according to the news report. The workers’ lawyers asked the court to award them $15.2 million in attorneys’ fees and reimbursement of expenses, to be paid out of the $40 million settlement.

The settlement provides that Wal-Mart’s hourly employees in Massachusetts will recover between $400 and $2,500 based on number of years of employment. It also calls for Wal-Mart to maintain various systems and hotlines to ensure the company’s compliance with wage and hour laws.

The company agreed to use a “clock- out/lock-out program” that prevents workers from using company terminals and cash registers if they’re not clocked in for work, and workers can anonymously call a hotline to report missed rest breaks, meals or off-the-clock work, the proposed settlement says.

“Resolving these lawsuits is in the best interest of our company, shareholders and associates,” Walmart spokeswoman Daphne Moore said, according to Bloomberg. “These cases were filed years ago and the allegations are not representative of the company we are today.”

The Massachusetts agreement brings the total amount of Wal-Mart wage-and-hour lawsuit settlements to almost $900 million, including a December 2008 agreement to pay as much as $640 million to settle more than 60 wage-and-hour class actions filed in state and federal courts.

Last month, Wal-Mart received final approval of a settlement in which it will pay between $65 million and $85 million to resolve wage-and-hour violations alleged by more than three million workers in Nevada – the largest wage-and-hour class on record (see Wal-Mart Wage-and-Hour Settlement Approved in NV).

Remaining is a Pennsylvania case in which workers won a $78 million jury verdict in 2006 over rest breaks and unpaid work. The verdict has been appealed.