Wal-Mart workers win $78.5 million lawsuit

By Betsey Piette
Philadelphia
Published Oct 25, 2006

A Philadelphia jury found Oct. 13 that Wal-Mart, the world’s largest retailer and Pennsylvania’s largest private employer, knowingly benefited from not paying employees for all the time they worked. The jury awarded $78.5 million to current and former employees of Wal-Mart Stores Inc.’s Pennsylvania stores. The ruling involves nearly 187,000 workers.

After a five-week trial, the Common Pleas Court jury found that Wal-Mart failed to pay workers for their rest breaks, forcing employees to work off the clock. The jury found that the mega-chain knowingly received an unfair benefit from not paying the employees.

Wal-Mart could be forced to pay more damages in the case.

“I would say Wal-Mart was stealing our time, because we weren’t getting our breaks,” former employee Delores Killingsworth Barber of North Philadelphia testified to the jury. Another Philadelphia area employee, Michelle Braun, told of being locked inside the store and forced to work without pay after she had clocked out when her shift ended.

Wal-Mart attorney Neal Manne argued that the lead plaintiffs were just a small group of disgruntled employees. However, the fact that at least seven other class-action lawsuits and more than 50 smaller lawsuits are pending against Wal-Mart on wage and hour issues proves otherwise.

In December, California jurors awarded $172.3 million to a class of 115,919 current and former Wal-Mart and Sam’s Club workers who were made to miss meal breaks.

In the Pennsylvania case, jurors found that workers at Wal-Mart were forced to work more than 33 million rest breaks between 1998 and 2001 because company management were under pressure to cut costs. Store managers received bonuses that sometimes doubled their pay if they reached the profit goal.

While clearly a victory for the workers involved, the class-action finding fails to address the ongoing problem that the world’s largest retailer continues to make mega-profits off the back of its seriously underpaid work force.

In 2004, Wal-Mart Chief Executive Officer Lee Scott received a salary of $1.2 million and $22 million in bonuses, stock awards and stock options. In 2005, Wal-Mart’s average sales “associate” earned $17,114 a year–that’s more than $10,000 under the poverty level of a two-person family to meet basic needs. In addition, Wal-Mart’s health insurance policy only covers 43 percent of its 1.39 million employees. And those covered end up paying a high proportion of their incomes to cover premiums and deductibles.

A 2005 study, “The Effect of Wal-Mart on Local Labor Markets” by David Neumark, also found that the average Wal-Mart store reduces wages per person by 5 percent for all workers in the county in which it operates.

While Wal-Mart clearly profits from underpaying workers at stores in the United States, its biggest profit margin comes from exploiting workers in Wal-Mart factories abroad. Workers from Bangladesh, China, Indonesia, Nicaragua and Swaziland brought a class- action lawsuit against Wal-Mart in September 2005, asserting that they were often paid less than the legal minimum wage. Some said they were beaten by managers and were locked in their factories.

Wal-Mart workers need more than lawsuits. They need a company-wide union that can fight for workers’ rights at home and abroad.

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