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Wal*Mart To Pay $33 Million To Settle FLSA Proceeding

Wal*Mart will pay more than $33 million in back wages to settle a self-reported wage violation case with the U.S. Department of Labor. The U.S. Labor Department's Fair Labor Standards Division, announced that the case involves about 87,000 employees. By settling, Wal*Mart avoids payment of any fines or penalties. A similar claim addressed in a suit by the California Labor Commissioner filed has not reached a settlement.

Though it sounds like a large settlement, it is probably far below Wal*Mart's true liability. In the current settlement, employees had no input and no legal representation. In other cases involving similar claims by classes of employees represented by counsel, Wal*Mart has been found to have much greater liability. For example, in October, a group of Pennsylvania Wal*Mart employees won a $78.5 million judgment for off-the-clock work and rest break violations, and in December 2005, a California jury awarded more than $172 million on similar claims.

As some readers may recall, a January 2005 Wal*Mart settlement with the DOL called for payment of just $135,540 by the retailer, and the Inspector General's report on the settlement, issued later that year, declared that it contained significant concessions and was significantly different from similar settlements with other companies, particularly with respect to some highly unusual restrictions on the DOL's ability to assess monetary penalties. The next time you wonder about the value of an attorney's services when the seven-figure fee application is approved in a large wage and hour case, compare and contrast these figures:

2007 DOL v. Wal*Mart: $33 million nationwide
2005 DOL v. Wal*Mart: $134,540 nationwide

2006 Private class action v. Wal*Mart: $172.2 million (California only)
2006 Private class action v. Wal*Mart: $78.5 million (Pennsylvania only)


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