Wal-Mart settles wage and hour claims for $40 million…

December 9, 2009

For the second time in the past week, a major corporation has settled a lawsuit for $40 million. As we footnoted last week, Dell (DELL) quietly disclosed in its Q that it had settled a shareholder lawsuit for $40 million. And then yesterday, Wal-Mart Stores (WMT) disclosed in its 10-Q that on Oct. 19 it had settled a long-running wage and hour dispute in Massachusetts for $40 million. Needless to say, Wal-Mart never put out a press release on the settlement, though the Boston Globe reported on the settlement last week and called it the biggest wage-and-hour settlement in Massachusetts history.

Granted the $40 million is small change for a company of Wal-Marts size. But given the number of wage and hour lawsuits that Wal-Mart faces — the Q only describes the number as “various” — one can see how these settlements could start to pile up, especially if some folks start smelling settlement. Keep in mind that last December, Wal-Mart paid $640 million to settle 63 state and federal lawsuits that were also related to wage and hour laws, which works out to just under $10 million per suit. Here’s how Wal-Mart describes the wage-and-hour issues in the current Q:

The Company is a defendant in various cases containing class-action allegations in which the plaintiffs are current and former hourly associates who allege that the Company committed wage-and-hour violations by failing to provide rest breaks, meal periods, or other benefits, or otherwise by failing to pay them correctly. The complaints generally seek unspecified monetary damages, injunctive relief, or both. The Company cannot reasonably estimate the possible loss or range of loss that may arise from these lawsuits, except where the lawsuit has been settled or otherwise as noted below and described elsewhere in this Form 10-Q.

The filing then goes on to describe two suits — the one in Massachusetts which was settled and a second one in Philadelphia which Wal-Mart lost two years ago and was ordered by a judge to pay $188 million. That case is currently under appeal. But how many other similar suits are out there remains a big mystery.

Image source: Associated Press/Douglas Pizac

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