SAN FRANCISCO – Wal-Mart intentionally failed to pay hundreds of truck drivers in California the minimum wage, a federal jury decided Wednesday, awarding the drivers more than $54 million in damages and opening up the retail giant to additional penalties.
The seven jurors returned the verdict in a lawsuit accusing the company of not properly paying drivers in accordance with California law for activities that included inspecting and washing their trucks and for layovers.
The company argued that the drivers are paid for activities that include those tasks and that they are not working during layovers. Scott Edelman, an attorney for Wal-Mart, said he was pleased to win seven of 11 claims.
“The findings on the other claims were dictated, we believe, by juror instructions that the court gave that were wrong and will be the subject of post-trial motions and, if necessary, an appeal,” he said.
A spokesman said Arkansas-based Wal-Mart Stores Inc. is likely to appeal. Randy Hargrove said in a statement that the company’s drivers are among the highest-paid in the industry, earning from about $80,000 to over $100,000 per year.
Wal-Mart believes “that our truck drivers are paid in compliance with California law and often in excess of what California law requires,” Hargrove said.
More than 800 drivers who worked for Wal-Mart between October 2005 and October 2015 sought $72 million in damages, the bulk of it for layovers when they say they are required to stay with their trucks. Their attorneys said at trial that additional damages and penalties could push the total Wal-Mart owed to more than $150 million. A judge will determine civil penalties.
“The facts in the law clearly show that these drivers were not paid for all the duties they did, like the pre-and post-trip inspections, and they were not paid for their rest breaks,” said Butch Wagner, attorney for the drivers.
Wal-Mart Stores Inc. — the nation’s largest private employer — has faced other criticism over its pay and treatment of U.S. employees.
The company announced last year that it was giving a raise to about a half-million U.S. workers. The raises were part of a $1 billion investment that the retailer said also was intended to give workers more opportunities to advance and more consistent schedules.
Wal-Mart drivers are not paid by the hour. Wages are based on mileage and specified activities.
The drivers’ attorneys pointed to a ruling in their favour from U.S. District Judge Susan Illston, who said last year that Wal-Mart would be in violation of California law if it enforced its driver pay manuals because they say no pay is earned for certain tasks.
The company argued that it paid drivers for activities that included other, smaller tasks and could not have a separate payment designation for everything they did, some of which took just minutes.
At trial, Edelman likened what the plaintiffs were asking for to a baker who charges a flat fee for a cake, not the individual tasks of buying the eggs, putting the cake in the oven or cleaning the dishes after.
“When you pay a baker $20 to bake a cake, what are you paying that baker to do?” Edelman said during his closing argument. “Is it just to put the cake in the oven for however long? Because that’s essentially what the plaintiffs are arguing.”
Wal-Mart pays drivers $42 for 10-hour overnight layovers as an extra benefit, but it does not control their time during that period, Edelman said. Drivers are free to go to the movies, exercise or do other activities, he said.