Wal-Mart Takes $172 Mil Hit In Lunch Break Case


By George Anderson
Allegations by retail workers that they’ve had breaks cut short or denied altogether by managers when stores are understaffed and/or simply very busy may be as old as retailing itself. Of course, as most retailers understand, what once was an accepted practice doesn’t fly anymore – especially when a jury is involved.
Yesterday, a jury in California decided Wal-Mart was guilty of violating a 2001 state law requiring employers to give a 30-mimute, unpaid lunch break to all employees who work a shift of six hours or more.
The jury awarded $172 million ($57 million in general damages and $115 million in punitive damages) to 116,000 current and former workers who joined in the suit.
Wal-Mart said it would appeal the case. The company argues that California state law does not allow for punitive damages to be assessed. “The meal-period premiums in question are penalties, rather than wages,” it said in the statement. “In short, California law prohibits penalties on top of penalties.”
While acknowledging that some mistakes were made when the California law first went into effect, Wal-Mart maintains it is in 100 percent compliance with it today.
Wal-Mart settled a similar suit in Colorado for $50 million.
Moderator’s Comment: How often do incidents occur today where retail workers are denied breaks or asked to work off the clock, compared to the past?
Why do allegations persist that this practice continues when labor laws are very clear in this regard? –
George Anderson – Moderator
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15 Comments on "Wal-Mart Takes $172 Mil Hit In Lunch Break Case"
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Even Wal-Mart does not deny doing this, only the penalty amount. The key point here is that this is done all of the time in retail. Changing this, unfortunately, does require extra effort, and lawsuits like this help initiate these types of changes. The important part is that Wal-Mart has made these changes and is in compliance. After lawsuits in Colorado and California, Wal-Mart knows that it could potentially be facing a larger set of lawsuits from every state it sells in. Wal-Mart is doing the right thing by acknowledging the problem, fixing it and addressing this up-front. It looks like the new management at Wal-Mart is finally helping change the way their business is done.
I’m with David on this and will add that, just as Sak’s has become the sacrificial lamb for punitive retailer practices towards vendors (while certainly not the worst offender), Wal-Mart is fulfilling that role with employee issues (ditto on offenders). At the risk of telling my own little walked-to-school-in-the-snow story, I built my career on unpaid overtime, staying ’til it got done, and working every weekend I can remember. I guess that would be called abuse these days!
A way one company worked this out was to schedule less than the minimum hours to require it. If the minimum for a break was 6 hours they scheduled for 5.5 hours. The down side was working 6 days a week and then generally falling below the minimums for full benefits. Or, they simply split the shift, with a full hour or two off.
Both sides have to be flexible. Occasionally, you get busier that anticipated, but trying to control your labor expense by requiring working off the clock is unacceptable.
If they did, they should pay and the managers should be disciplined.
If you have never punched a time card, worked on salary or commission all your life, stayed late until the work was done, it’s hard to feel sorry for someone who missed their smoke break because work needed to get done. People should get paid for the time they put in, but being a big crybaby about working a lunch break now and then or off the clock for a few minutes is petty and immature. If an employer abuses this often, then it should be dealt with. When I worked in retail we did this all the time but we always rewarded the loyalty with bonuses and job security. When it came time to lay someone off we always kept the team players and fired the complainers.
The law varies from state to state, so national chains have to be careful with their supervision. Retailing’s daily work flow, unlike some other industries, seems to come in waves: bunches of customers followed by very few and bunches of large deliveries followed by none. So it’s tempting for supervisors to ask people to work during the heavy waves, even if people haven’t taken breaks during the light times. And many people forget to punch out even if they do take a break. Maybe people should wear RFID devices on their name badges to track break room time.
Curiously, though the case was (apparently) argued here in Oakland, it attracted little attention when it was ongoing….but back to the issue at hand: the plaintiffs may or may not be whiners. The issue, I believe was LUNCH breaks, not smoke breaks – but ultimately the law is what it is. If Wal-Mart and other retailers don’t like it, they should try and change it. For Wal-Mart or its defenders to complain about the law being enforced seems petty and immature. Is the enforcement selective, targeting “big”/high-profile companies? Perhaps, but that’s just one of those things in our imperfect world…. kind of like being asked to work through your break.
I would have to disagree with David calling certain individuals “cry baby’s” for missing their breaks and lunches. Some people need those breaks for a variety of purposes, even medical reasons. If this is a habitual pattern for a company, it needs to be addressed…simple as that. When I started in management, I always made sure that my employees received their breaks and lunches when they were entitled to them. Especially at this time of the year, you need that break where you can compose yourself and recharge your ability to help customers more efficiently. I learned a long time ago at the beginning of my retail career, that “if you can survive a holiday season at Wal-Mart, you can survive any season at any retail store.” This holds true, and also includes timely and well-deserved breaks and lunches.
I’m much more inclined to agree with setaylor than with David. The managers have a responsibility and taking action against employees who resist being bullied and demand their rights is not at all right. IF management is regularly and consistently denying employees their breaks then the law needs to be enforced. If head office doesn’t take action then obviously someone else needs to.
Hmmmm. I’m having a hard time comprehending all of these responses. What do people expect from employees at lower levels? Is it not humane to be able to expect to get something to eat and get a chance to go to the bathroom during an 8-hour day? This is pretty basic here. And how could skipping those basic human needs possibly develop promotable employees when you present them with denying them basic needs? Who would want to work for a company like that?
Yes, retail comes in “waves,” but it doesn’t sound like we’re discussing “postponing” breaks/lunches until there’s an opportunity to go for a break/meal; this sounds like not getting any breaks/meals at all.
I feel David’s and Carol’s comments are unfair and inhumane. First, this issue is not about “smoke breaks,” it is about a 30-minute unpaid lunch break after six hours work. Does that need sound like someone who isn’t a “team player,” for goodness’ sake? And the “job security” comment seems code language for “we will reward you by not firing you.” Gee, thanks. My retailing background is primarily department store, and I watched my employers (ADG, Mayco) drive away the best and brightest to more life-balanced employers and industries.
There are two types of people in the world. Those who go through bad treatment and say “That was terrible, everyone should have to go through what I went through,” versus “That was terrible, no one should have to go through what I went through.”
116,000 people is NOT a “few crybabies”. There was a pattern. Wal-Mart does not deny it, and they are implementing some steps that should help prevent a repeat.
The purchasing power of minimum wage today is about the lowest it’s ever been, except for in 1996 which was just before it was raised the last time. These people talking about how tough they had it compared to those in the modern day should perhaps walk a mile in the shoes of today’s retail clerk. At $5.15 an hour, you start to really need any little break you can catch, and not getting a break after 6 hours straight is definitely a break you need to catch…
The issue of being asked to work lunches and breaks in a retail setting is a symptom of a much larger problem. After 30 years of retail management, the pressure to produce results and an inadequate salary budget comes to mind as why these conditions are perhaps not dictated but certainly “allowed” unless it sees the light of day. Then the policy is taken out, and the store management is reprimanded for the violation. The pressure to do more with less is a powerful force that will tend to have negative results if it is done without integrity.