Wal-Mart to pay $54.25M to settle Minn. lawsuit

Wal-Mart Stores Inc. said Tuesday it will pay up to $54.25 million to settle a class-action lawsuit that alleged the discount giant cut workers' break time and didn't prevent employees from working off the clock in Minnesota.

The class includes about 100,000 current and former hourly workers who were employed at Wal-Mart Stores and Sam's Clubs in Minnesota from Sept. 11, 1998, through Nov. 14, 2008.

Wal-Mart has also agreed to maintain electronic systems, surveys and notices to stay compliant with wage and hour policies and Minnesota laws.

In July, a Dakota County judge ruled against Wal-Mart in the lawsuit, saying the Bentonville, Ark.-based retailer violated state labor laws 2 million times by cutting worker break time and "willfully" not stopping managers from having employees work off the clock. Court proceedings had been scheduled for next month to determine punitive damages, and Wal-Mart could have faced more than $2 billion in damages. Instead, the settlement announced Tuesday will have a preliminary hearing for approval on Jan. 14.

Justin Perl, a lead attorney for the plaintifffs, said he was "gratified that these hourly workers will now be paid after seven years of litigation."

Wal-Mart spokesman David Tovar said the company is committed to paying its workers for all time worked and to make sure they get rest and meal breaks. Managers who violate its policies are subject to punishment including firing, he said.

An undisclosed part of the settlement will go to the state of Minnesota.

Wal-Mart faced 76 similar class action lawsuits in courts across the country as of March 31, the company said in its most recent 10-K filing with the Securities and Exchange Commission.

In Pennsylvania, workers won a $78.5 million judgment in 2006 for working off the clock and through rest breaks, and the company was hit with a $172 million verdict in California in 2005 for illegally denying lunch breaks. Wal-Mart has filed appeals in both those cases.

In afternoon trading, Wal-Mart shares fell 92 cents to $56.64.