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Not a Typo: Wal-Mart Misclassification Suit Could Result in More Than $100,000,000 Settlement

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A recent ruling that Wal-Mart violated state minimum wage laws by not correctly paying its truckers could force the company to face penalties exceeding $100,000,000.  The class of drivers argued that they were not compensated for mandatory activities and tasks such as inspecting and washing their trucks.  

U.S. District Judge Susan Illston sided with the drivers, agreeing that “activities that are not compensated separately cannot be included in tasks that are paid for by the company.”  She wrote:

“Under California law, the drivers must be paid for all the time that they were subject to Wal-Mart’s control.  Here, certain required tasks are specifically designated unpaid activities.”

Butch Wagner, of the law firm representing the 720 past and present Walmart truckers, told The Fresno Bee that the judge’s ruling “is a big victory for our clients.”  The civil dispute between the truckers and Walmart began in 2008 when Wagner, Jones, Kopfman & Artenian sued Wal-Mart, accusing the retailer of wage theft.  Wal-Mart eventually chose the U.S. District Court in the Northern District of California in San Francisco to be tried. Last September, Judge Illston certified the class action case.

Wal-Mart states they will continue to fight the claim and that they do not agree with Illston’s decision.  In court papers, Wal-Mart lawyers shot down Wagner’s legal argument saying:

“Nothing in the Labor Code requires a separate ‘pay code’ for each act that goes into cleaning the house.

Does the Labor Code require drivers to be separately paid for putting a key in the ignition or while sitting at a stop light?  Must Wal-Mart use a separate pay code for a pre-trip inspection and other duties of a trucker?

Plaintiffs provide no principled explanation — nor any legal authority — as to why a separate pay code must be assigned to each and every act comprising the various activities that employees are already paid to perform.”

The lawsuit includes claims that Wal-Mart failed to abide by the California labor code with respect to proper breaks for meals and rest.  The issue of whether or not the drivers were properly compensated for sleeping in their cabs during layovers is also part of the lawsuit.  Drivers currently earn $42 for staying in their cab during the required 10-hour layover period.  Lawyers for the drivers argue that this is less than minimum wage and that Wal-Mart offers the bonus so they do not have to hire security guards to watch trucks during layovers.  In her ruling, Judge Illston argued that the physical location of the layover inside the tractor cab was “specified and controlled by Wal-Mart.”

A jury will hear the case next April to determine damages.


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