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High Court Won't Review Wal-Mart's $188M Loss In Rest Break Suit

Published: 4/4/2016

BREAKING: High Court Won't Review Wal-Mart's $188M Loss In Rest Break Suit By Matthew Bultman Law360, New York (April 4, 2016, 10:22 AM ET) -- The U.S. Supreme Court on Monday said it would not review a $188 million award to a class of Wal-Mart workers’ who were denied rest breaks, leaving in place a lower court ruling the retail giant claimed came from an unconstitutional "trial by formula."


Wal-Mart Stores Inc. had appealed a December 2014 ruling from the Pennsylvania Supreme Court that affirmed the award for nearly 200,000 workers who were allegedly forced to work off the clock and skip rest and meal breaks. 

The retailer argued the plaintiffs had used an unfair "trial by formula," which the U.S. Supreme Court expressly barred in its 2011 Dukes v. Wal-Mart decision. While only six plaintiffs testified on behalf of the class, the class’s experts used extrapolated evidence to calculate the total amount of damages suffered.

It insisted the Supreme Court needed to take up the case to prevent state courts from hamstringing corporations' ability to defend themselves from class actions. 

As is customary, the high court did not elaborate on why it declined to review the appeal. The court only hears a fraction of the cases it is presented with. 

"We’re gratified that the court denied review of this case and are hopeful that the Wal-Mart workers will finally after all these years be paid their back wages that were stolen by Wal-Mart," Michael D. Donovan, an attorney for the workers, told Law360. 

Wal-Mart spokesman Randy Hargrove said the company was disappointed the Supreme Court decided not to review the case. He noted the company has taken additional steps in the years since the lawsuit was filed to enhance its timekeeping system and create more employee training. 

“While we continue to believe these claims should not be bundled together in a class-action lawsuit, we respect the court's decision,” he said. “We will now determine how we move forward in the trial court.” 

The case was started in 2002 by former Wal-Mart employees Michelle Braun and Dolores Hummel, who claimed the company owed them $3 million for 187,000 off-the-clock hours from 1998 onward. Lawyers in the case claimed that Wal-Mart made workers skip more than 33 million breaks and 2 million meal periods from 1998 to 2001. 

In June 2011, the Pennsylvania Superior Court affirmed the Philadelphia County Court of Common Pleas' $188 million judgment against Wal-Mart, finding that there was sufficient evidence to conclude that Wal-Mart breached its contract with its workers and violated state wage laws. 

Wal-Mart took the case to the state’s high court, which concluded in December 2014 — a year and a half after oral arguments — that individual examinations of all 187,000 class members weren’t necessary to determine whether employees were forced to work through their breaks. 

Appealing to the U.S. Supreme Court, Wal-Mart argued that a number of state trial courts have been approving the sort of “procedural shortcuts” that had been ruled out in the landmark Dukes decision, adding that appellate courts have been condoning these practices. 

In Dukes, the high court decertified a nationwide class of 1.5 million female Wal-Mart workers who alleged due to bias they were given short shrift on pay and promotions, while raising the bar for class certification. 

“Even after Dukes, 'trial by formula' remains alive and well in the courts of Pennsylvania and other states, and, in the absence of this court's intervention, will continue to yield proceedings that deny class-action defendants their due process,” Wal-Mart said last May. 

For their part, the workers argued the Pennsylvania decision was made by corporate records and admission of uniform business practices, not the “trial by formula” that Wal-Mart had been complaining about.

The case drew attention from several business groups, including the Retail Litigation Center and the U.S. Chamber of Commerce, which backed Wal-Mart and urged the Supreme Court to hear the appeal. The groups warned that the decision would lead to a surge in class actions in Pennsylvania and potentially other state courts, even beyond the context of employment law. 

The plaintiffs are represented by Michael D. Donovan of Donovan Axler LLC, Robert Beck and Andre Mura of the Center for Constitutional Litigation PC and Judith L. Spanier of Abbey Spanier LLP.

Wal-Mart is represented by Theodore Boutrous, Mark A. Perry, Amir C. Tayrani, Julian W. Poon, Alexander K. Mircheff and Bradley J. Hamburger of Gibson Dunn. 

The cases are Wal-Mart Stores Inc. et al v. Braun, and Wal-Mart Stores Inc. et al v. Hummel, case numbers 14-1123, and 14-1124, before the U.S. Supreme Court. 

-- Additional reporting by Bryan Koenig. Editing by Sarah Golin. 
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