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U.S. Supreme Court Refuses to Review $188 million award to Wal-Mart Workers

The U.S. Supreme Court refused to review a $188 million award to Wal-Mart workers, which leaves standing a lower court ruling that Wal-Mart has called unconstitutional.

Plaintiffs sued Wal-Mart for its failure to pay for time worked off the clock and contractual paid rest breaks. The plaintiff's second amended complaint, filed in 2002, alleges Wal-Mart clandestinely sought to deprive workers of their pay. According to the complaint, Wal-Mart gave workers assignments that could not reasonably be completed within their hours of work. Consequently, workers were forced to work off the clock to complete their tasks. If they refused, Wal-Mart pressured employees to "complete their work assignments through intimidation, threats of discharge, and demotion, while at the same time precluding such employees from clocking in for hours worked necessary to accomplish their assignments outside their regular work schedule." Probably the most shocking allegation to come from the plaintiffs is that Wal-Mart would "lock-in" employees overnight, meaning that employees would have to wait inside the store until it was opened for the next day.

Wal-Mart argued its due process rights had been violated because the trial amounted to a "trial by formula." Specifically, its argument was that when a court certifies a class and enters a "class-wide judgment based on evidence pertaining only to a subset of class members that is extrapolated to the class as a whole without any consideration of individualized defenses," there is a violation of due process. Wal-Mart pointed to the inclusion of thousands of class members for which there is no evidence of missed breaks or work off the clock as the clearest example of a "trial by formula." While the plaintiffs contended that extrapolation from the interviewed class members to the total class members was necessary because of "spoilated" records, Wal-Mart argued that it "changed its recordkeeping practices and decided for legitimate business reasons not to continue to generate records that it was under no obligation to create in the first place." Amicus briefs filed by the Retail Litigation Center and the U.S. Chamber of Commerce sought to warn the Supreme Court that there would be a surge of litigation if it refused to hear Wal-Mart's concerns, but the briefing did not sway the court enough to hear the case.

The legal team at SFMS has substantial experience litigating employment matters. If you have any questions regarding this subject or this posting, please contact Alec Berin ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

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