January 9, 2020

Wal-Mart Truckers Haul In $54M Wage Class Action Verdict

As originally posted on Law360.com

On Wednesday, November 23, 2016, a California federal jury found that Wal-Mart Stores Inc. intentionally violated state wage laws by failing to pay a certified class of truckers for time spent on work-related on-duty tasks, awarding class members more than $54 million in damages.

The jury found the 839 truckers were entitled to back pay for some of the allegedly unpaid tasks named in the lawsuit, awarding damages for pre- and post-trip inspections and California-required rest breaks, but not for washing trucks, fueling, weighing the trucks’ load, waiting at vendor and store locations, performing adjustments, complying with U.S. Department of Transportation inspections, or meeting with driver coordinators.

Jurors also found that drivers were under Wal-Mart’s control during federally mandated 10-hour layover breaks, during which the truckers were required to stay with their trucks. The drivers had been paid $42 for the time, not the $67 to $90 they would have earned had they been paid minimum wage during the class period. The jury awarded approximately $44.7 million to make up the difference Wednesday.

Liquidated damages and penalties have yet to be determined. Class attorneys said that if the judge finds Wal-Mart’s defense was not carried out in good faith, that would double the jury’s award. They added that the jury found Wal-Mart intentionally failed to pay class members for more than 100,000 pay periods, and that, according to the class attorneys’ math, each unpaid period will carry a $250 fine, adding approximately $25 million to the total.

The truckers had asked the jury for a $72.5 million award, calculating that with liquidated damages and an estimated $25 million in statutory penalties for not paying the minimum wage, the total payout would be $170 million.

Wal-Mart’s attorney Scott Edelman of Gibson Dunn pointed out during a post-verdict interview that his side prevailed on the majority of the issues in the case.

“This is far less than what they asked for, and from our perspective, it’s mostly a victory. They were zeroed out on seven of the 11 tasks at issue,” Edelman said.

Class attorney Butch Wagner of Wagner Jones Kopfman & Artenian LLP told Law360 that opposing counsel did “a hell of a job.”

“They threw everything at us,” Wagner said. “But the facts of the case and the law were overwhelmingly on our side.”

The suit hinged on the pay codes drivers input for certain activities, such as arriving on-site and hooking a tractor to a trailer.

The truckers had alleged that other required tasks like pre- and post-trip inspections had no associated activity code or compensation. Wal-Mart argued that the duties the manual described were not exhaustive and that the allegedly unpaid tasks were included in other pay codes.

Wednesday’s decision ends a hard-fought, three-week trial marked by contentious battles over jury instructions.

U.S. District Judge Susan Illston had ruled on summary judgment in 2015 that the mandatory layover policy and unpaid tasks laid out in Wal-Mart’s driver manual violated California wage law.

A week into trial, Wal-Mart filed a motion threatening a mistrial over some of the guidance Judge Illston offered the jury from the bench, and she added an instruction saying, “Wal-Mart may … pay drivers for certain tasks through activity codes that include those tasks.” Class counsel called the tweak “a total 180,” saying it shifted the case’s focus from whether Wal-Mart followed its own illegal written policies to whether ambiguous wording in its employee manuals entitled truckers to back wages.

Edelman said Wednesday that his side would likely pursue an appeal based on prior rulings and jury instructions that both sides “fought long and hard” over.

“We think the prior rulings were wrong, which led to an error in the jury instructions, which led to our loss on the few issues on which we lost. And we intend to appeal those,” he said.

Also at issue in the case were the 10-hour layovers.

Wal-Mart had argued that the drivers were not under its control during the breaks, saying that truckers were required to let supervisors know if they did not plan to sleep in their trucks, but that truckers did not need to request permission.

During their deliberations, the jury asked the court to define “control.” The judge told them there was no definition under California law, but used examples from prior case law that found employers had exercised control over workers who were not allowed to leave the office during their lunch breaks and over agricultural workers who were required to take the employer’s bus to work but could do whatever they liked during the ride.

One juror told Law360 on Wednesday that the judge’s instructions were very helpful during deliberations.

“There was no way not to understand what she was looking for,” the juror said.

Class attorney Russel Myrick of Wagner Jones said it was clear to him the jury “did their best to listen to the evidence and come to the right verdict.”

But Wal-Mart’s spokesman Randy Hargrove said the facts did not bear out the verdict, adding that Wal-Mart truckers are among the highest paid in the industry, making approximately $80,000 to $100,000 per year.

“We do not believe the facts support the decision and will be filing post-trial motions and are likely to appeal,” Hargrove told Law360 in an email. “We strongly believe that our truck drivers are paid in compliance with California law and often in excess of what California law requires. Wal-Mart is a great place to work, as demonstrated by the fact that more than 90 percent of our drivers have been with the company for more than 10 years.”

The class is represented by Daniel M. Kopfman, Lawrence M. Artenian, Russel Myrick and Angela E. Martinez of Wagner Jones Kopfman & Artenian LLP, Jacob M. Weisberg of the Law Offices of Jacob M. Weisberg, and Stanley Saltzman of Marlin & Saltzman.

Wal-Mart is represented by Scott A. Edelman, Catherine A. Conway, Michael Li-Ming Wong, Jesse A. Cripps Jr. and Rachel S. Brass of Gibson Dunn and Adam C. Smedstad of Scopelitis Garvin Light Hanson & Feary PC.

The case is Ridgeway et al. v. Wal-Mart Stores Inc. et al., case number 3:08-cv-05221, in U.S. District Court for the Northern District of California.

–Written by Cara Bayles.

–Editing by Edrienne Su.