As retail titan Wal-Mart seeks to overturn a $187.6 million class-action award over denied meal and rest breaks, one of the Pennsylvania Supreme Court justices hearing oral arguments in Harrisburg this month questioned how the class of employees could have proven its case without using the company's payroll records.
Wal-Mart's counsel, Theodore J. Boutrous Jr. of Gibson, Dunn & Crutcher in Los Angeles, argued that the payroll records were indeed admissible.
But Mr. Boutrous argued that smaller class actions could have been brought attacking management practices at the store level, or that the class action could have been divided into a two-part process in which the cases were looked at first for "truly common" issues en masse and then second, adjudicated in individual proceedings.
Instead, the case was handled in "one fell swoop all mixed together," he said.
Mr. Boutrous was responding to Justice Max Baer asking how the class would have been able to go forward with its allegations that it was not properly compensated for missed rest breaks and off-the-clock work.
The plaintiffs argued Wal-Mart breached contracts with its employees that were created by its handbook in which the retailer stated that employees would receive 15-minute paid rest breaks.
Plaintiffs' counsel, Michael D. Donovan of Donovan Axler, said the payroll records of 52 million shifts were entered into evidence by stipulation and the records were validated by Wal-Mart before employees were paid.
The records themselves stated when there were "too few breaks" or "short breaks," Mr. Donovan said.
The state Supreme Court agreed to hear the appeal from Braun v. Wal-Mart and Hummel v. Wal-Mart on "whether, in a purported class action tried to verdict, it violates Pennsylvania law (including the Pennsylvania Rules of Civil Procedure) to subject Wal-Mart to a 'trial by formula' that relieves plaintiffs of their burden to produce classwide 'common' evidence on key elements of their claims."
In order to prove that Wal-Mart breached the contracts with employees for paid rest breaks, the plaintiffs did not present the testimony of employees that they were forced to miss rest breaks, but instead presented the testimony of an expert who opined based upon records of employees clocking in and clocking out that any shortened or missed rest breaks were caused by Wal-Mart managers, Mr. Boutrous said.
Justice Baer, who was the most vocal questioner during the oral arguments in these cases, said the meaning of the records was a factual question for the jury. "You had a real shot" at winning on what the records meant, he said, but the jury on this particular case did not agree with Wal-Mart.
Allowing the verdict to stand would be contrary to the U.S. Supreme Court's decision in Wal-Mart v. Dukes in which those justices rejected "trial by formula" of more than 1.5 million female employees alleging a companywide policy of discrimination, Mr. Boutrous said.
The state Supreme Court is hearing an appeal from the Superior Court of Pennsylvania, which ruled in 2011 that Philadelphia jurors, in 2006, rightly concluded that Wal-Mart's practices violated state wage and hour laws. The case was brought on behalf of about 187,000 current and former Wal-Mart workers in Pennsylvania.
Amaris Elliott-Engel: email@example.com or 215-557-2354.