Wal-Mart to settle employee lawsuits of up to US$640m

Posted by Editorial on 5th January 2009

Wal-Mart Stores, the world’s largest retailer, has announced the settlement of 63 wage and hour class action lawsuits that have been pending against the company for several years.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.

As a result of the settlement, 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.

“Resolving this litigation is in the best interest of our company, our shareholders and our associates,” said Tom Mars, Executive Vice President and General Counsel, Wal-Mart Stores, Inc. “Many of these lawsuits were filed years ago and the allegations 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,” Mr Mars claimed. “We have worked hard to have the right communication, processes and systems in place to help us live up to this commitment.”

The cases covered by these settlements were brought by several different groups of plaintiffs’ counsel. Frank Azar of the law firm of Franklin D. Azar & Associates, P.C., co-lead counsel in fourteen states and believes the deal fair to all parties. “We are pleased with this settlement and believe it is fair and reasonable for our clients,” he said. “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.”

“After many years of hard fought litigation, the parties have reached an agreement that values the work of Wal-Mart’s employees by providing both economic and injunctive relief,” Carolyn Burton of the Mills Law Firm, co-lead counsel in a group of 35 cases consolidated in Nevada and cases covering four other states, concluded.