BENTONVILLE, Ark. — Wal-Mart Stores here said it has agreed to settle 63 wage and hour class-action lawsuits for between $352 million and $640 million, depending on the amount of claims submitted by members of the class.
The settlement of the lawsuits, which have been pending against the company for several years, comes as a more labor-friendly administration prepares to take office in Washington. The prospect of facing new legislation that might make it easier for Wal-Mart's workers to organize unions may have prompted the retailer to settle what amounts to all but about a dozen of the labor lawsuits pending against it.
Paul Secunda, an associate professor at Marquette University Law School, Milwaukee, was quoted as saying the settlement might be viewed by Wal-Mart as a way of weakening arguments in favor of unionization as the Employee Free Choice Act looms large for retailers in 2009.
“This is part of their overall strategy to get their labor house in order, and compared to what unionization might cost them, I think they probably realized it was a small price to pay,” he told the Wall Street Journal.
Wal-Mart said it would take a fourth-quarter charge of $250 million, after taxes, or about 6 cents per share, for the settlement. In addition to the monetary payments, which are subject to court approval, Wal-Mart also said it has agreed to continue to use electronic systems and other measures designed to maintain compliance with wage and hour laws.
“Resolving this litigation is in the best interest of our company, our shareholders and our associates,” said Tom Mars, executive vice president and general counsel, Wal-Mart Stores, in a prepared statement. “Many of these lawsuits were filed years ago, and the allegations are not representative of the company we are today.”
The agreement to settle the suits, which involve allegations of non-payment for hours worked and other violations, follows Wal-Mart's announcement last month that it would pay up to $54.25 million to settle a class-action labor lawsuit in Minnesota alleging that it forced employees to work through their breaks without pay. In 2007, Wal-Mart reached an agreement with the Labor Department to pay $33 million to workers to compensate for underpayment for overtime.
Wal-Mart still faces a gender-discrimination suit — Dukes vs. Wal-Mart — alleging that the retailer discriminated against female employees in terms of pay and promotions. It is the largest civil rights class-action suit in U.S. history.