New Life For Massachusetts Wage Case

It has been a long, strange trip for Salvas v. Wal-Mart, the Massachusetts wage case first filed back in 2001, and now the highest court in Massachusetts is set to weigh in on whether Salvas can proceed as a class action.

The case was originally certified back in December of 2004, as a class of over 50,000 current and former Wal-Mart employees alleging they had been denied wages and meal/rest breaks. Wal-Mart appealed, and in November 2006 a second judge decertified the class on the basis that each associate’s situation was unique and therefore a class action was not proper. The 2006 decertification also included another significant decision:

The judge, who also excluded the testimony of the employees’ expert witness, said the employees could not rely on Wal-Mart’s payroll records to prove their case without first demonstrating that they are overwhelmingly accurate.

Well, Salvas and Wal-Mart can now prepare for Round 3, as the Supreme Judicial Court of Massachusetts has agreed to hear the Salvas appeal. And Wal-Mart might start considering ways to discredit the accuracy of its own payroll methods. According to Salvas attorney Robert Bonsignore:

Federal and state statutes require those records to be accurate, and Wal-Mart uses them to pay taxes and report its financial performance to shareholders...It’s good enough to pay the Wal-Mart family executives millions of dollars in bonuses and . . . it’s good enough to pay the store managers $100,000 or more in bonuses. But the court says it’s not good enough to pay the employees, period.

Sounds about right.

SJC gets Wal-Mart suit [Boston Herald]

Massachusetts’ Supreme Judicial Court will hear an appeal of a massive class-action lawsuit that alleges Wal-Mart Stores Inc. systematically deprived its hourly Bay State employees of their earned wages and rest and meal breaks.

The lawsuit, first filed in 2001 in Middlesex Superior Court, alleges the mega-retailer illegally altered timecards to decrease reported payroll expenses, including by clocking out employees one minute after they clocked in.

A Superior Court judge decertified the lawsuit’s class-action status and threw out the case, filed on behalf of 65,000 present and former Wal-Mart employees in Massachusetts, in November 2006. The judge, who also excluded the testimony of the employees’ expert witness, said the employees could not rely on Wal-Mart’s payroll records to prove their case without first demonstrating that they are overwhelmingly accurate.

The employees’ attorney, Robert Bonsignore, filed briefs this month arguing the case should be allowed to proceed using Wal-Mart’s payroll system records. Federal and state statutes require those records to be accurate, he said, and Wal-Mart uses them to pay taxes and report its financial performance to shareholders.

“It’s good enough to pay the Wal-Mart family executives millions of dollars in bonuses and . . . it’s good enough to pay the store managers $100,000 or more in bonuses,” Bonsignore said. “But the court says it’s not good enough to pay the employees, period.”

Using Wal-Mart’s paper and electronic payroll records, Bonsignore’s expert witness found that the Wal-Mart employees allegedly were deprived of wages for 10.1 million missed rest breaks from 1995 to 2005.

He also found 21,383 alleged incidents of one-minute clock-outs where employees went uncompensated and that Wal-Mart allegedly realized $423,010 in free labor from employees whose work was not recorded by the system.

Wal-Mart also allegedly inserted 13,572 unpaid meal periods into employees’ records from 2001 to 2005, court documents state. A separate, earlier Superior Court ruling prevented employees from suing for missed meal breaks.

“As a result of its willful misconduct, Wal-Mart’s ill-gotten gains exceeded $25,000,000,” court documents state.

Bonsignore has 35 similar cases pending against Wal-Mart in other states. Wal-Mart employees won a $167 million judgment in California and a $151 million judgment in Pennsylvania for similar claims.

But a Wal-Mart spokesperson said a “great majority” of courts have ruled that wage-and-hour cases aren’t suited for class-action status because “every individual’s circumstances are unique.”

“It is our policy to pay every associate for every hour worked, and any manager who violates that policy is subject to discipline, up to and including termination,” the spokesperson said. “The company has very clear policies on meal and rest breaks.”

Posted by Corey Himrod on Thursday, January 10, 2008