State’s Highest Court To Hear Wal-Mart ‘Time Theft’ Class Action

On January 8, 2005 Sprawl-Busters reported that a Superior Court Judge in Middlesex County, Massachusetts had ruled against Wal-Mart’s motion to dismiss a class action suit regarding the retailer’s employee time records. The suit charges that Wal-Mart failed to pay its employees for their time worked, and did not give them proper meal and rest breaks. The suit was filed by former Wal-Mart workers Crystal Salvas and Elaine Polion. The lawsuit says that Wal-Mart illegally altered timecards to decrease reported payroll expenses, including “clocking out” employees one minute after they clocked in. “This is huge,” the plaintiffs’ lawyer, Robert Bonsignore of Medford, said at the time. “What this means is we have a reasonable probability of success, based on a very tiny sample that showed they knowingly took time away from employees.” A computer expert hired by the plaintiffs found 7,000 examples in a one year period where Wal-Mart managers deleted large blocks of time from their employee payroll records, according to The Boston Herald. This amounts to what Wal-Mart would call “time theft” from its own workers. Wal-Mart workers have no time cards. Their hours are all recorded by the company computer. If Wal-Mart managers want to shave off hours, only they have the official employee record. Wal-Mart, of course, denied the charges of time theft. This case was first filed three and a half years ago. It is one of at least 35 similar lawsuits in other states across the country that claim Wal-Mart forced employees to work overtime without pay. If the Massachusetts “associates” win, Wal-Mart could owe them triple the back wages due each worker. The Boston Herald estimated that this lawsuit could cost Wal-Mart as much as $100 million to settle. One of the ways Wal-Mart drives down prices is by short-changing its own workers, in this case, by “stealing” hours for free. On January 10, 2008, this lawsuit was back in the headlines. The Massachusetts Supreme Judicial Court (SJC) has agreed to hear an appeal of this class action suit. Seven years have now gone by since this case was filed. Bonsignore lost his case at the Middlesex Superior Court level. That court decertified the class action status of the lawsuit in November of 2006, which means that the 65,000 affected present and former employees would have to pursue their case individually, and not as part of a larger group. Pursuing individual cases would be cost-prohibitive for most plaintiffs. The Superior Court decision did not allow Attorney Bonsignore to introduce testimony from his expert witness, and told employees that they could not rely on Wal-Mart’s payroll records to prove their case without first demonstrating that they are overwhelmingly accurate. Bonsignore then filed his case with the SJC, arguing that the case should be allowed to proceed using Wal-Mart’s payroll records, because Federal and state laws require those payroll 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,” Bonsignore told the Boston Herald. “But the court says it’s not good enough to pay the employees, period.” Bonsignore said his expert witness reviewed Wal-Mart’s electronic payroll records and determined that the retailer shortchanged its workers for 10.1 million missed rest breaks during the decade from 1995 to 2005. The expert’s review found 21,383 examples of “one-minute clock-outs” where employees went uncompensated. Wal-Mart saved $423,010 in free labor from its workers by taking them off the clock. Bonsignore also says that the giant retailer added 13,572 unpaid meal periods into employees’ records from 2001 to 2005. “As a result of its willful misconduct, Wal-Mart’s ill-gotten gains exceeded $25,000,000,” the lawsuit says.

The Herald reports that Bonsignore has 35 similar cases pending against Wal-Mart in other states. This lawsuit is similar to ones against Wal-Mart in California and Pennsylvania that have cost the company more than $318 million to settle. Wal-Mart’s standard response to reporters in these cases is, “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 company has very clear policies on meal and rest breaks.” But in its Annual Report, Wal-Mart warns its shareholders: “The Company is a defendant in numerous cases containing class action allegations in which the plaintiffs are current and former hourly associates who allege that the Company forced them to work ‘off the clock’ or failed to provide work breaks, or otherwise that they were not paid for work performed… The company cannot reasonably estimate the possible loss or range of loss which may arise from these lawsuits.” Bonsignore claims that Wal-Mart’s time theft has given the company $25 million that it owes its workers. In 2007, Wal-Mart recorded $11.28 billion in net profit. Paying their employees back for their ‘time theft’ would cost Wal-Mart one-quarter of 1% of its net profit. Wal-Mart likes to say, “our people make the difference.” In this case of time theft, it was Wal-Mart that allegedly kept ‘the difference’ between what their workers earned, and what they got paid. Wal-Mart is being accused of stealing from its workers, which suggests that one way the company provides ‘everyday low prices’ is by stealing time from its employees. To that degree, everything that Wal-Mart sells to the public is a form of “stolen goods,” subsidized by the workers who stock the shelves and ring the cash registers.

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