Wal-Mart Willfully Violated Minnesota Labor Laws Entitling Members Covered by Class Action Lawsuit to Millions in Damages and Potentially Billions in Civil Penalties Minnesota Trial Court Holds
Plaintiffs filed a labor law class action against Wal-Mart in Minnesota state court alleging that it required them to work “off the clock” without pay and deprived them of meal and rest breaks, that it violated Minnesota’s Fair Labor Standards Act (MFLSA), and that it failed to maintain accurate time records. Braun v. Wal-Mart, Inc., Case No. 19-CO-01-9790 (Minn. Dakota County, June 30, 2008) [Slip Opn., at 1-2 and 6-7]. The class action sought various relief including civil penalties, liquidated damages, and injunctive relief, id., at 2. The class action complaint alleged further that Wal-Mart’s conduct was “willful” so as to fall within the longer three-year statute of limitations period under Minn. Stat. § 541.07(5), id. The scope of the class action included claims against Sam’s Club, id., at 3 n.1. The trial court certified the litigation as a class action, id., at 7, and the matter proceeded to a bifurcated bench trial, id., at 2. At the liability phase, the trial court limited each side to 60 witnesses and 100 hours of testimony. Id., at 2. The trial court heard about 160 hours of testimony from more than 90 witnesses, and received into evidence almost 1200 exhibits. Id. Forty (40) of the witnesses were Wal-Mart hourly employees, id., at 7. The court then issued a 151-page opinion ruling against Wal-Mart in the class action.
In part, defense attorneys argued that class action treatment was inappropriate because “each individual’s experience is so intrinsically unique that each individual should have to testify about their experience.” Braun, at 11. The trial court found, however, that “[s]ome general patterns and some shared experiences emerged from the testimony at trial” such that it could “decide the factual and legal issues in dispute on a class-wide basis.” Id. In part, the court found that Wal-Mart “should have been on notice of that there was a potential widespread problem of missed rest and meal breaks.” Id., at 18. This problem appears to have been caused by understaffing, and while employee contemporaneous complaints that there were too few employees was not alone sufficient to establish chronic understaffing, see id., at 16-17, an internal audit that revealed tens of thousands of missed meal and rest breaks attributed the problem to “staffing and scheduling not being prepared appropriately,” see id., at 19. The understaffing was particularly problematic in light of Wal-Mart’s written policy to avoid overtime. See id., at 27-29. The trial court found that Wal-Mart “ignored” the internal audits, id., at 20. Subsequent audits revealed that “in November 2003, every audited store in Minnesota scored ‘unsatisfactory’ for the portion of the audit dealing with rest and meal break compliance.” Id., at 21. Moreover, nationally “rest and meal break compliance was the item most frequently rated as ‘unsatisfactory.’” Id., at 22. The court rejected defense efforts to attack the reliability of these audits. Importantly, the court also found that Wal-Mart’s decision to terminate the practice of employee swiping in and out for breaks was directly tied to the problems identified by the audits: “Wal-Mart chose to stop requiring associates to clock in and out for rest breaks, at least in part, to avoid creating what might be construed or used, whether fairly or not, as evidence of missed breaks in litigation.” Id., at 24. The court additionally found that “payroll pressure” contributed to this problem, id., at 25-27.
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