Wal-Mart agrees to record $40M wage settlement in Massachusetts

By Dave Copeland, Globe Correspondent

Wal-Mart agreed to pay $40 million to as many as 87,500 of its current and former employees in Massachusetts in what is the largest wage-and-hour class action settlement in the state’s history.

The class action lawsuit was filed in 2001 and accused the retailer of denying workers rest and meal breaks, refusing to pay overtime and manipulating time cards to lower employees’ pay. Under the terms of the deal, which was filed in Middlesex Superior Court today, any person who worked for Wal-Mart between August 1995 and the settlement date will receive a payment between $400 and $2,500 depending on number of years worked, with the average worker receiving a check for $734.

“The magnitude is large – it’s bigger than most settlements paid in wage and hour cases, said Justin M. Swartz who has handled similar cases, including a still-pending case against Wal-Mart for Outten & Golden LLP, a New York-based law firm. “But you would expect it to be bigger since Wal-Mart is the biggest retailer.”

Under the terms of the settlement, neither side is allowed to comment. But in an affidavit filed with the settlement, plaintiffs lead counsel Phil Gordon of the Boston-based Gordon Law Group said the settlement “dwarfs settlements of similar class actions against Wal-Mart across the country. Gordon joined the case in June, after Wal-Mart nearly settled it for a sliding scale that would have obligated it to pay between $20 million and $40 million. The court rejected that settlement, and Gordon pushed for the flat, $40 million figure, according to the affidavit.

“For many employers, this settlement will serve as a reminder to take the payment of earned wages and benefits seriously. For many other employers, it will provide comfort that all Massachusetts businesses must operate on a level playing field – that following the laws and paying employees in full will not be a disadvantage to them,” Gordon wrote in the affidavit. “But most importantly, for employees of Wal-Mart, it finally pays them their earned wages and it puts in place systems and processes to ensure that abuses like those alleged never happen again.”