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Employment Law Alert: Wal-Mart Gets Hit Big In California Wage & Hour Case

On December 6, a California judge refused to set aside a $172 million verdict against Wal-Mart in a wage and hour case. The verdict included a whopping $115 million in punitive damages. The case arose under a California statute requiring employers to provide employees with a 30-minute unpaid meal break for every five hours worked. Another section of California’s labor code provides that, for every meal period missed, the employee is entitled to one hour of pay. The lawsuit, which was brought by a class of some 116,000 Wal-Mart employees, alleged that they were regularly denied their meal breaks by the retailer.

Bottom Line

This case will be appealed. On appeal, one issue will be whether an award of punitive damages is even appropriate under the statutes upon which the case was based. Apparently, there is a split among the California Appellate Courts as to whether the one-hour payment is wages to the affected employees or, instead, is intended to punish the non-complying employer. We will keep you apprised of further developments in this case.

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