Wal-Mart to pay $54.25 million to settle Minn. lawsuit

stocks shelves at a Wal-Mart
Wal-Mart has also agreed to maintain electronic systems, surveys and notices to stay compliant with wage and hour policies and Minnesota laws.
Photo by Joe Raedle/Getty Images

The case involves about 100,000 current and former hourly employees who worked in Wal-Mart and Sam's Club stores in Minnesota over the last decade. They claimed the retailer didn't give them their full rest breaks and required them to work off-the-clock. A state district judge agreed.

Back in July, Judge Robert King Jr. ruled that Wal-Mart violated the state's work rules more than two million times. He awarded the plaintiffs $6.5 million.

Now, just a month before the second stage of the case was to begin, Wal-Mart settled the case for $54.25 million. As part of the settlement, the retailer agreed to maintain electronic systems, surveys and notices to ensure compliance with wage and hour policies and Minnesota laws.

Wal-Mart and the attorneys for the plaintiffs issued a joint statement saying that the settlement is "fair and reasonable for all concerned." But, plaintiff attorney Justin Perl said the two sides also agreed not to discuss details of the settlement until a judge approves the deal next month.

"I can tell you, though, that we're very satisfied with the settlement."

"I can tell you, though, that we're very satisfied with the settlement," Perl said. "We're gratified that these hourly workers will be paid after seven years of litigation. And, we're happy that the state of Minnesota will receive a large amount of money as well."

Observers say the state will reportedly receive about $14 million dollars from the settlement, which could be the largest civil penalty ever in Minnesota.

Fines could have been substantially higher, though. State law allows $1,000 in penalties for each violation, and the judge found that Wal-Mart violated the law more than two million times.

Hamline University law professor Joseph Daly, who followed the case closely, said Wal-Mart has faced similar lawsuits in at least 35 states. But Daly said the retailer rarely settles a case.

"They usually fight hard, they don't give up," Daly said. "They've lost several cases. They lost a case in California for example, but they appeal everything. They just keep fighting and fighting. It's unusual that Wal-Mart would settle a case like this."

Minneapolis labor attorney Justin Cummins said Wal-Mart likely made a cost-benefit analysis and decided to settle the case.

"Hopefully this will help to encourage employers in Minnesota and across the country to be vigilant in complying with the law," Cummins said.

Even though this case had just gone to trial last summer, it had been under litigation for seven years and included Wal-Mart employees who'd worked at company stores since 1998.

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