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A Victory Against Wage Theft and For Class Actions in Braun v. Walmart

A Victory Against Wage Theft and For Class Actions in Braun v. Walmart

photo credit: WisconsinJobsNow via photopin cc

By Victoria Ni
Managing Attorney

In a significant victory for workers who’ve suffered wage theft, the Pennsylvania Supreme Court yesterday upheld an almost $188 million jury verdict against retail behemoth Walmart for failing to pay a class of employees for missed rest breaks and work after shifts had ended.

The 4-1 majority decision in Braun v. Wal-Mart Stores, Inc. shot down Walmart’s argument that due process required that liability and damages be determined by an individual examination of each of the 187,979 class members’ claims.      

The decision strongly pushes back against the defense assertion—now raised in pretty much every class action—that due process requires nothing less than a series of mini-trials for each class member. Of course, such a requirement would essentially eliminate class actions, so that corporations like Walmart would be able to cheat their employees and never be held responsible.

During the six-week trial that took place in 2006, the Braun plaintiffs presented evidence of Walmart’s written policy to provide rest breaks, to pay employees for all hours worked, and to prohibit unpaid work. The plaintiffs presented Walmart’s own internal audits that showed widespread rest break violations, as well as expert analysis of Walmart’s time clock records, cash register log-in data, and corporate policies. And they presented representative testimony from class members who said they had regularly been forced to work without breaks. To be blunt, the evidence was overwhelming that Walmart was breaking its own policies and the wage-and-hour laws.

The jury found Walmart liable for violating Pennsylvania law and its own company rules, awarding $187,648,589 to class members.

On appeal, Walmart claimed that the jury’s verdict should have been overturned because it had been improperly subject to the kind of “trial by formula” supposedly prohibited by the U.S. Supreme Court in the watershed cases of Wal-Mart Stores, Inc. v. Dukes (yet another Walmart case!) and Comcast Corp. v. Behrend. Those cases held that plaintiffs had failed to justify class treatment for those particular cases in the employment discrimination context and antitrust context, respectively. 

But the Pennsylvania Supreme Court explained that the “trial by formula” disapproved of in Dukes was limited to “a plan to try a sample set of class members’ claims of sex discrimination” and, if the claims were found to have merit, to extrapolate what damages the entire class should receive without any further individualized hearings. This, the court said, was not what had happened in this case. Rather, Walmart’s own company policies and its own business records and internal audits tended to show that there was an extensive pattern of wage-and-hour violations throughout Pennsylvania stores. 

The court also said that the Braun plaintiffs (unlike the Comcast plaintiffs) had successfully connected their theory of why Walmart should be held liable (wage violations) to their damages calculations—based on Walmart’s own business records. The court reiterated that “where a theory of liability is capable of class-wide proof, calculations of damages need not be exact.” 

So, neither Dukes or Comcast controlled the outcome here.

To conclude, the court said:

There was a single, central, common issue of liability here: whether Wal-Mart failed to compensate its employees in accordance with its own written policies. On that question, both parties presented evidence. Wal-Mart’s liability was proven on a classwide basis. Damages were assessed based on a computation of the average rate of an employee’s pay (about eight dollars per hour) multiplied by the number of hours for which pay should have been received but was not. In our view, this was not a case of “trial by formula” or of a class action “run amok.” Accordingly, the judgment of the Superior Court is affirmed.

Public Justice joined with a coalition of public interest groups interested in workers’ rights to sign on to an amicus brief spearheaded by the Impact Fund in California—one of two in support of the plaintiffs (compared to Walmart’s four). Our brief pushed hard against a broad interpretation of the “trial by formula” reference in in Dukes, explaining that the case did not condemn of all forms of aggregate or formulaic proof in class actions and that there is no due process right for defendants to contest each class member’s claim individually. 

Congratulations to the plaintiffs and their counsel for achieving justice, long overdue.