Published on:

Walmart Ordered to Pay $188 Million for Allegedly Violating its Own Employee Handbook

The federal Fair Labor Standards Act (FLSA) set forth numerous rules and regulations that employers throughout the country are obliged to follow. The FLSA is most commonly referenced for minimum wage and overtime laws, but it covers much more than that.

In addition to the FLSA, employers may be bound by other regulations, such as state law (which is sometimes more strict than the FLSA) and even their own policies. Under the FLSA, an employee handbook created by an employer is considered to be an enforceable document, and the employer must abide by the terms laid out in the handbook.

According to a recent class action wage and hour lawsuit against Wal-Mart, the retail giant allegedly violated its contract with employees by refusing to pay them for meal breaks, as laid out in the company’s own Employee Handbook. According to the lawsuit, the Handbook allegedly states that all hourly employees who work between three and six hours per shift must be paid for one short break. Employees who work longer than six hours at a time, are entitled to be paid for two short breaks.

The class action lawsuit was filed by two former employees of Wal-Mart who alleged that, despite the rights granted to them by the Handbook, Wal-Mart regularly refused to let them take their meal breaks, and refused to pay them for their missed breaks. The two lead plaintiffs filed the lawsuit on behalf of themselves and all other similarly situated employees of Wal-Mart.

The Pennsylvania Superior court ruled that Wal-Mart’s employee handbook constituted a contract, and that Wal-Mart had illegally breached that contract. Based on the size of the class of plaintiffs, which consisted of about 187,000 current and former employees, the court ordered Wal-Mart to pay about $188 million to settle the claims.

Wal-Mart appealed the decision and the matter went to the Pennsylvania Supreme Court, which affirmed the ruling of the lower court. Wal-Mart has again appealed, asking the Supreme Court to hear the case.

According to Wal-Mart’s attorneys, the defendant was denied due process, and was instead subjected to a “trial by formula”. Wal-Mart’s attorneys claim the court was wrong to assume elements of six plaintiffs’ claims extended to members of the entire class. To support their claim, Wal-Mart is referencing another class action lawsuit in which the Supreme Court ruled in favor of the retail company: Dukes v. Wal-Mart.

The attorneys for the plaintiffs are not concerned by the appeal to the highest court in the country. They have pointed out that Wal-Mart is trying to argue that a handful of employees cannot speak for all class members.

On the contrary, that’s exactly what class representatives are meant to do. Before a judge certifies a class of plaintiffs, one of the qualifications that must be met is proving the lead plaintiffs are adequate representatives of the entire class. This expedites the litigation process by saving the court from the time and resources of having to examine the claims of each class member individually. Instead, plaintiffs only have to prove that the violations were a result of company-wide policy.The Chicago overtime lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims against large retail chains such as Petsmart, Officemax, Staples, Smart & Final, Apple, Walgreen’s, CVS, Urban Outfitters, GAP, Abercrombie & Fitch, Limited, Forever 21, Macy’s, Target, JC Penney’s, Lowes, Marshalls, TJ Max, Victoria’s Secret, Nieman Marcus, Saks Fifth Avenue, Best Buy, Home Depot, Apple, Best Buy, Sears, K Mart, J.C Penney, Walmart, Costco, PetSmart, REI and other retail chains for misclassifying employees as managers, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, failing to pay for time spent on security checks, and otherwise failing to pay workers for overtime and other wages. If you are the victim this practice call us at one of our offices near Evanston and Joliet at (312) 869-4095 or contact us online.