On July 20, 2009, a Washington state court judge gave the final approval to a $35 million settlement in a class action lawsuit alleging that Wal-Mart Stores, Inc. had violated Washington’s wage and hour laws.  The settlement covers employees who worked at Wal-Mart or Sam’s Club stores in the State of Washington during the time period between September 1997 and February 2009, and approximately 88,000 current and former Wal-Mart employees will be eligible for a share of the settlement proceeds.   The lawsuit, Barnett v. Wal-Mart Stores, Inc., Wash. Super. Ct., No. 01-2-245538 (2009), was filed by Wal-Mart employees in September 2001, alleging that Wal-Mart had violated Washington wage and hour laws by failing to pay employees for all hours worked and by failing to provide employees with required meal and rest breaks.

Washington’s wage and hour laws require that nonexempt employees be paid at least the statutory minimum wage (currently $8.55 under Washington law) for all hours worked.  In addition, employers in Washington are required to provide employees with a 30-minute meal period at least two hours after and no later than five hours after their shift begins.  Employers must also provide employees with a rest period of at least 10 minutes for every four hours of working time and may not require employees to work beyond three of those four hours without a break.  The representative plaintiffs alleged that Wal-Mart repeatedly violated these provisions by requiring that employees work off the clock and by prohibiting employees from taking meal and rest breaks.  Wal-Mart denied any liability or wrongdoing of any kind in agreeing to the settlement.

The Barnett case and resulting $35 million settlement illustrate the importance of determining the obligations an employer owes its employees under state law.  Those states that have minimum wage requirements normally provide for higher standards of compensation than the federal government, increasing employers’ exposure to liability for violations such as off-the-clock work.  Moreover, though federal law does not contain rest and meal break requirements for employees other than minors, a number of states not only have statutes requiring breaks, but also provide for fines and penalties that are assessed against the employer for violations of those statutes.  Therefore, to minimize the risk of liability for minimum wage and meal/rest break violations, employers should review their work policies to ensure that employees are paid for every hour worked and that rest and meal breaks are available to and taken by employees.