OAKLAND, Calif. – Wal-Mart Stores Inc. (WMT) plans to appeal a $172 million judgment awarded to thousands of employees who claimed they were illegally denied lunch breaks.
A jury on Thursday found the world's largest retailer violated a 2001 state law that requires employers to give 30-minute, unpaid lunch breaks to employees who work at least six hours.
The verdict came after nearly three days of deliberations and four months of testimony. In a statement, Wal-Mart said it would appeal.
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.
"We absolutely disagree with their findings," company attorney Neal Manne said. Manne claimed the state law in question could only be enforced by California regulators, not by workers in a courtroom.
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 Bentonville, Ark.-based 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. The company earned $10 billion last year.
Attorney Fred Furth, who brought the case on behalf of the workers, said outside court that the jury "held Wal-Mart to account."
The company 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.
Wal-Mart 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 company contended that the law does not allow for punitive damages because "the meal-period premiums in question are penalties, rather than wages," it said in the statement. "In short, California law prohibits penalties on top of penalties."
The class-action 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 workers claimed they were owed more than $66 million plus interest, and sought damages to punish the company for alleged wrongdoing.
The company settled a similar lawsuit in Colorado for $50 million.
A federal lawsuit pending in San Francisco accuses Wal-Mart of paying men more than women.
The verdict comes as the company wages 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.