OAKLAND, Calif. – An Alameda County jury on Thursday awarded $172 million to thousands of employees at Wal-Mart Stores Inc.(WMT) 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.
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, Ark.-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 had 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.
The lawsuit was initially filed by a handful of 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 was the latest bit of bad news for the Arkansas retail giant. Critics have launched campaigns trying to stop its expansion efforts and have targeted it for giving short shrift to workers. The company also 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 federal court accuses the company of paying men more than women.
A trial is underway in Marin County Superior Court in which a group of boys who were injured while riding bicycles claims Wal-Mart and San Rafael, Calif.-based Dynacraft BSC Inc. conspired to hide defects in a key bicycle part.