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Ganging Up on Wal-Mart

By Annie Gausn | Aug. 2, 2006

Law Office Management

Aug. 2, 2006

Ganging Up on Wal-Mart

Making Wal-Mart pay punitives.

By Robert Selna
      In December 2005 an Alameda County jury jolted the employment bar when, on top of $57 million in compensatory damages, it slammed Wal-Mart with $115 million in punitive damages for denying meal breaks to 116,000 of its California workers. This apparently was the first time a state court jury granted punitive damages for a wage and hour violation of the state Labor Code, and for plaintiffs lawyers across the country who have filed suits against the mega-retailer, it added more blood to the water.
      "When I looked at [Wal-Mart's] conduct, it screamed out for punitive damages," says Jessica Grant, an attorney at The Furth Firm, who relied on a nationwide internal audit Wal-Mart conducted six years ago to help show that the company violated labor laws. According to Grant, internal auditors concluded that stores were violating the law when they deprived workers of their meal and rest breaks.
      Wal-Mart got some more bad news when, around the same time the jury in Alameda County rendered its verdict, a judge in Minnesota ruled that that state's Wal-Mart's employees could also sue for punitive damages. Jon Parritz, who represents the Minnesota Wal-Mart workers, says he'll use the same company audit Grant relied on to prove her claims. "We're going to hold Wal-Mart accountable for their own records," Parritz vows.
      Wal-Mart officials declined to discuss the pending Minnesota litigation. But after the Alameda County trial, the company did issue a press release, insisting that under California law punitive damages are prohibited when a statutory penalty already exists. The company also indicated that it intends to appeal the verdict.
      Some observers say that even if Wal-Mart were to lose $100 million per case in punitive damages (there are at least eight cases currently set for trial), it wouldn't have much effect on the retail behemoth's bottom line. (In 2004 Wal-Mart's profits topped $9 billion.) But Parritz thinks that at the very least, the Alameda verdict serves as a wake-up call to major retailers that they can be vulnerable to punitive damages in labor matters. Indeed, Parritz believes winning punitive damages from a major retailer represents a big win not only for the plaintiffs in the Wal-Mart case but also for all those "trying to vindicate the rights of employees."

Annie Gausn

Daily Journal Staff Writer

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