Wal-Mart to face New Jersey class-action pay suit
Wal-Mart Stores Inc., the world's largest retailer, must face a class-action lawsuit by New Jersey workers claiming the company forced them to work through breaks and cheated them of overtime pay, the state Supreme Court ruled.
The decision today reversed two lower-court rulings that denied the hourly workers the right to sue as a group. The trial court ``abused its discretion in declining to certify'' the class action, the court said. The high court certified a class covering about 72,000 former and current Wal-Mart workers. One legal expert said the decision ``isn't good news for Wal-Mart.''
``My speculation is that a jury is likely to find for the plaintiffs, given New Jersey juries and the pretty strong evidence put on elsewhere,'' said Carl Tobias, a law professor at the University of Richmond in Virginia.
Wal-Mart, based in Bentonville, Arkansas, faces more than 70 U.S. wage-and-hour suits, including class actions by employees claiming the company failed to pay for all hours worked or didn't compensate them properly for overtime.
Since December 2005, juries in Pennsylvania and California have awarded Wal-Mart workers a total of $251 million in pay and damages over such claims.
``We're disappointed with the decision and we're studying the opinion,'' Wal-Mart spokesman John Simley said.
Workers' attorney Judy Spanier said her clients were ``very pleased'' with the decision. ``It essentially adopts every argument we made,'' she said.
Two Courts Reversed
The ruling sends the case back to state court in New Brunswick for pretrial evidence-gathering.
The trial court first refused to grant class-action status, saying the case would be unmanageable. A midlevel appeals court upheld the decision. The Supreme Court found both lower courts were in error.
``By denying shelter to an alleged wrongdoing defendant, we deter similar transgressions against an otherwise vulnerable class,'' the court in Trenton said in a 5-1 decision.
``We find that common questions of law and fact predominate over individualized questions and that the class-action device is superior to other available methods,'' the court said. It didn't rule on the merit of the workers' claims.
The workers claim Wal-Mart forced them to work through meal breaks, locked them in retail stores after they clocked out and coerced them into working off the clock. The company broke state wage and hour laws and breached contracts with employees, the workers say.
The company operates 44 Wal-Mart stores, one Wal-Mart Supercenter and nine Sam's Club in New Jersey, the court said. The class will cover current and former hourly employees from May 30, 1996, to the present.
Wal-Mart shares rose 48 cents to $47.60 at 1:50 p.m. in New York Stock Exchange composite trading.
The case is Iliadis v. Wal-Mart Stores Inc., A-69-06, New Jersey Supreme Court (Trenton).
(Published by Bloomberg, May 31, 2007)