< HOME  Thursday, December 22, 2005

employees take Wal-Mart out to LUNCH, collect $172m

A California jury awarded $172 million "to 116,000 current and former Wal-Mart employees whose lunch break rights were violated."
$115 million is punitive damages, and $57 million is general damages. Other than that, the details of the case are not clear from the article. But, there are some clues.
"Wal-Mart's position [is] that the meal-period premiums in question are penalties, rather than wages . . . [t]his means that punitive damages cannot be recovered in this case."
"Andrew Grossman, executive director of ... Wal-Mart Watch, said ... '[t]oday's verdict affirms that 'time theft' labor abuses are a chronic and systemic problem for Wal-Mart and its dangerous business model.'"

Apparently, Wal-Mart's engaging in some questionable practices that rob Wal-Mart employees of their time.

Hmmm, sounds familiar.

Now, there's absolutely no excuse for Wal-Mart's conduct.

HOWEVER, I feel compelled to point out the folly of these types of class actions.

Let's look at who benefits from this lawsuit and who benefits from the accompanying publicity.

Let's start with the lawsuit. Who gets the money?

A class action suit is brought by one or more plaintiffs on behalf of a larger group that has a common interest, a common harm. After attorneys’ fees, any settlement or court award is divided among those participating in the suit.

The operative word here is 'after.'

Now, often these contingency fees are rather large. Supreme Court JusticeSandra Day O’Connor, who spoke out against “out-of-control class action lawsuits," describes class action contingency fees as "outrageous" and thinks that they "[turn] some lawyers into ‘overnight millionaires.’

I think she's right.

If I calculate right, if the entire $172 million verdict were divided among the 116,000 plaintiffs, without attorneys fees, each plaintiff would get just over $1400. After attorneys fees, if there's anything left, it won't be worth the time it takes to cash the check.

Let's look at the publicity. How sympathetic do you think the general public will be to employees that file suits against their employers because they've missed a few lunch breaks?

Again, I do not condone Wal-Mart's unconscionable exploitation of its workers. But, I am not the general public and the media and its monied suitors will have a heyday with this one. They'll bitch and moan about the high cost of doing business in America and blame petty employees for corporate flight to foreign markets.

So, there it is. Cui bono?

Current employees become former employees, while lawyers get their exorbitant fees and corporations have a good excuse to close down domestic operations and manufacture in countries where employees are sensible.

Workers MUST change their strategy. Class action law suits are NOT the way to go.

This beast has a thousand heads and for every one cut off, two emerge in its place. If we ever hope to defeat this monster, we MUST strike at the heart.


At Friday, December 23, 2005, Anonymous Anonymous said...

if employees were not afraid of losing their jobs, a lot more lawsuits would magically appear. who are we kidding, 80% of my employers were payroll crooks ( no overtime, no breaks, etc.), and i'm a professional!

At Friday, December 23, 2005, Anonymous Anonymous said...

When do we start applying the RICO statute to these organized crime companies?

At Friday, December 23, 2005, Anonymous Anonymous said...

Sadly these days unless you are salaried at under 24,000/yr (or maybe it was 27,000/yr), you aren't eligible for overtime pay whatsoever thanks to the "FairPay" laws that were enacted.

Thats a ridiculusly low salary to become ineligible for overtime.

Hell you can't even collect overtime if you're a "manager" whether you're making $6.50/hr or not!


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