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Posted on 12/19/2002 4:55:14 PM PST by Walkin Man
Wal-Mart Found Guilty in Overtime Case
By WILLIAM McCALL, Associated Press Writer
PORTLAND, Ore. - Wal-Mart, the world's largest retailer, forced employees to work unpaid overtime between 1994 and 1999, a federal jury found Thursday.
The lawsuit in U.S. District Court accused Wal-Mart Stores Inc. of violating federal and state wage laws. The jury did not rule on monetary damages, which will be decided in a separate trial.
More than 400 employees from 24 of Wal-Mart's 27 Oregon stores sued the retailer. It was the first of several similar suits across the country to come to trial.
Wal-Mart attorney Rudy Englund had no comment on the verdict and referred all questions to Wal-Mart headquarters in Bentonville, Ark.
The suit was filed by Carolyn Thiebes and Betty Alderson, who worked in managerial positions at Wal-Mart stores in the Salem area.
The suit claimed managers got employees to work off the clock by asking them to clean up the store after they'd clocked out and by deleting hours from time records.
It also said Wal-Mart reprimanded employees who claimed overtime. Workers felt forced to work after clocking out because managers assigned them more work than they could complete in an regular shift, the plaintiffs said.
Englund conceded during opening arguments Tuesday that some off-the-clock work occurred, but said company policy expressly forbid it.
Wal-Mart, a $218 billion company, employs a million workers in 3,250 stores in the United States.
The verdict was released after the close of markets. Wal-Mart Shares finished the day down 22 cents at $50.16 on the New York Stock Exchange (news - web sites).
Attorneys said the verdict could determine the fate of 39 other class-action lawsuits pending against the company in 30 states. Those suits, spread from California to New York, involve hundreds of thousands of workers seeking tens of millions in back pay.
Previously, Wal-Mart settled two similar overtime cases in Colorado and New Mexico.
The company reportedly paid $50 million two years ago to settle an off-the-clock lawsuit covering 69,000 workers in Colorado, and it recently settled for $500,000 a case involving 120 workers in Gallup, N.M., said one of the plaintiff's attorneys.
How do all those other businesses in Oregon get by without stealing their employee’s labor? No wonder Wal-Mart has been so successful at killing mom-and-pop stores, those saps actually followed the law!
They tried to get away with it and now they are paying the price. It would have worked out cheaper to just pay the overtime.
Having been in management in the service industry for many years, I can pretty much guess how this went down. The store managers probably have very aggressive gross margin goals and are probably under enormous pressure to generate a set level of profitability. In a nutshell, this means keeping expenses down. I can see how store managers might turn a blind eye regarding their employees working off the clock and thus not drawing overtime.
I'm not saying the store managers should be off the hook but the bulk of the burden likely lies with upper management. If you are a good manager and you achieve your profitability goals, the bar will simply be raised the next year, and then the year after that, until you are unable to meet your goal. I have personally experienced that frustration. After being a top manager in my company, my gross margin goal was raised so high that it was no longer attainable without cutting manpower to the point where my customer satisfaction would take a nosedive. Thus I was in the situation where I had a very profitable year and actually outperformed most of my peers, but I got a lousy review anyway because I didn't "hit my goal."
I agree with you. I have read some other stories about this issue with Wal-Mart. They put their store managers under enormous pressure to turn an ever-higher profit. One way to up profits is to force some employees to work 'off the clock'. It does seem like small change but Wal-Mart has the largest labor force in America, I believe. Multiply that small change by a million people and....
Aren't engineers classified as exempt employees?
I think this is different because these people were told to clock out first, then made to work more hours for no pay, which is illegal in the US. The engineers may not get overtime pay but still get their regular salary for those hours, don't they?
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No, they do not get paid for the overtime hours. They are required to work entirely for free.
Is that you willie green?
Most are. I've never been told exactly what that means other than you are exempt from not getting totally reamed.
The bottom line is exempt employees do not get paid overtime. They are always considered "on the clock". Here's a quick Exemption Checklist
A. Employee must have as his/her primary duty either:
1) Work requiring knowledge of advance type in a field of science or learning;
2) Original and creative work in an artistic field; or
3) Teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge as a teacher certified or recognized as such in the school system or educational establishment or institution by which he/she is employed.
B. Work requires the consistent exercise of discretion and judgment.
C. Work must be predominantly intellectual and varied in character as opposed to routine mental, manual, mechanical, or physical work and of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.
D. Time spent in activities not "an essential part of and necessarily incident" to professional duties may not exceed 20 percent of employee's own weekly hours worked.
E. Receives payment on a salary or fee basis at a rate of not less than $170 a week.
It's not uncommon for some companies to classify workers as exempt in order not to pay them overtime. I worked at a bank that had to re-classify some field technician positions to non-exempt because that's exactly what was happening.
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